As you may or may not know autism can be extremely expensive. Where you live in the world can dictate how much funding and insurance is available. In some cases, you may have to pay out of pocket which can lead to an incredible amount of debt. Luckily British Columbia is one of the top places in Canada for Autism funding and support. However, it’s still very costly when you have to pay for speech, occupational, physio and behavioural therapy for two boys on only one income source. If you don’t take control of your finances, you can easily spiral into a very stressful situation that will affect your marriage and family life.
The truth is, besides our mortgage, our family has been debt free for a while now. In fact, we are on the positive side and quite comfortable with our finances currently and for the long term. I want to share with you some of the things we have done and learned over the years to manage our finances well and avoid being in debt while preparing for the future.
1. Make a budget. Track your monthly income and expenses on a spreadsheet. This is a must do, otherwise its just guesswork, that’s where you get into trouble. Track all your bills, mortgage/rent, car, phone, Netflix, credit card, etc. This will help you figure out how much you have to play with each month. Set a monthly entertainment budget so you don’t go overboard. I recommend one person being in charge of the budget. The person who is more disciplined with money should be the one tracking the budget. In our case, my wife manages all the details. She is just much better with numbers than I am.
2. Reduce your expenses. Look at your monthly spending and decide which items you can cut down or remove completely. You have to be bold if you want to make a difference! Below are just some examples of things we have done as a family.
- Going to Starbucks for coffee. Are you addicted? Do you go every day? Maybe try reducing the frequency or start making your own drinks at home. I rarely go out for coffee anymore because I grind and make my own coffee at home using a french press. It’s fun and tastes amazing!
- Eating out too much? Save it for special occasions. Cooking your own food is way healthier anyways. Learn to make your own pizza or have a bbq. Cooking doesn’t have to be an all-day event. if you want something quick, make a sandwich or wrap. I personally like to make breakfast burritos.
- Do you really use that gym membership? Use it or lose it. Maybe start running or lifting weights at home instead. Go hiking or biking or even just walking.
- Do you really need that Cable TV? We hardly watch any TV these days and to be honest we have better things to do with our time. The only thing we have now is a Netflix account and that is more than enough for what we need.
- Going to a Movie Theater is expensive. Do you really have to see a movie the day or week that it comes out? Instead, invest in a really amazing home theatre with surround sound. I also have a PlayStation because my wife and I enjoy video games. Make your own popcorn or other healthier snacks. Avoid having to travel and deal with crowded lineups.
- Switch to a bank that offers cheaper monthly rates. This takes a bit of planning but if you are serious about saving money then every dollar counts right?
- Drop down to one vehicle. You will be spending less on gas and insurance. My wife and I have to compromise on the car usage and it can be tricky sometimes but overall well worth it. Working from home help in this regard. Maybe you are one of those lucky ones that can do without a vehicle and just use transit.
- Maybe it’s time to refinance your mortgage for a longer period of time so you can make lower monthly payments but still, have the option to pay more into it if you have extra money kicking around. We did exactly this when my salary was lower. It gives you peace of mind and your budget isn’t so tight.
- Get a work from home job. Save on gas, insurance and other commuting costs.
3. Throw away your credit cards. The problem with most people is that they want to purchase things now. You really shouldn’t have a credit card if you are not disciplined in paying it off every month otherwise you are paying way too much interest. You are better off to budget and save for what you want and then use a prepaid debit card to pay for it. You will feel better, be less stressed and not be in debt. Trust me on this one!
5. Live within your means. This means not going crazy when you spend things on food, entertainment, travel or your latest toys and gadgets. It means setting a budget and saving up for what you want, not maxing out your credit cards and then spending the next 2 years paying it off. If you’re making minimum wage, you shouldn’t live like you are making 50k/year. If you are making 50k/year, you shouldn’t live like you are making a six-figure salary. It just doesn’t make sense and will quickly lead to debt. If you have a mindset of focussing on things in life that are not so material in nature, this is much better. Rather than buying things, perhaps focus your energy on making yourself fitter or learn to cook better at home or reading books to expand your knowledge and education. The point is, there are things in life that are amazing and fun that doesn’t have to break the bank.
6. Invest in your future. You can’t afford to not think about your future. What you do now determines how you will live when you are older. We have always found gains through investing in mutual funds that are medium to low risk. Contribute regularly and over time you will see some great gains. Investing in RRSPs helps reduce the amount of tax you pay. Contribute regularly and you will see that interest compound. If you are tight on income, a creative option is to fill out a T1213 form to give you increased monthly income flow. This is only helpful if you are already getting an income tax return each year. So rather than waiting until the end of the year, it becomes available to you on a monthly basis. This is great because you can then invest this money into RRSPs or Mutual Funds which in turn will help reduce the amount of tax you pay. Bingo!
6. Donate to a Charity. Making a donation to your local charity means you pay less tax at the end of the year. Our family gives at least ten percent of our household income to charity. We get a pretty significant income tax refund back. So find a cause you are truly passionate about and support it! You will feel better and you will reap the rewards.
7. Buy instead of Rent. If you have the downpayment to purchase a home, it’s much better than renting because over time your property will go up in value. Think of this as a long-term investment. With the high cost of rent these days, you are practically throwing your hard earned money away. If you don’t have a home yet, start saving as soon as possible! We were lucky to have never rented but instead purchased our first home right when we were married. We were also able to put in a significant down payment so that our mortgage payments were not so high. Fast forward 10 years, now our home has practically doubled in value and equity has increased significantly.
8. Increase your income. This one is a little trickier to do sometimes. Are you making the income you need or want? Maybe it’s time to ask your boss for a raise? Maybe it’s time to look for a new job? Go back to school? Maybe you could use another source of income on the side? I did some IT consulting on the side while I was working fulltime. We also rented a part of our home to exchange students. This help pays for a lot of renovations we made on our home. If you are happy with the job you have and the salary you are making then you need to adjust your lifestyle to live within your means. See point #5.
9. Avoid quick money making schemes. Do not fall for anything that promises to give you lots of earning for very little work or time. It’s either a scheme or it is totally illegal. Either way, this is a sure fired way of getting into debt or even worse, thrown in jail. Stay away from pyramid schemes and anything else that seems too good to be true with a ten-foot pole. Stick to working hard and working smart. There’s no shortcut to success.
10. Buy insurance. Make sure you have proper insurance for health, life, medical dental, homeowner, disaster etc. You don’t want to put yourself in a situation where you will have to pay out of pocket for something that could have been covered by insurance. Of course, don’t go crazy with coverage, make your decision wisely.
11. Save your money. Always set aside a certain amount from your paycheck to put into a savings account. You never know when you might need to purchase something big down the road and it’s nice to have that money already available rather than having to borrow or use a credit card with a high interest rate.
12. Create an emergency fund. It should equal to 3-6 months worth of expense coverage. In case you lose your job or you are unable to work for a period of time, you will have some peace of mind knowing that you have some time. This was handy when I was between jobs. You don’t feel so rushed or stressed out when looking for your next career.
13. Pay off your debts. Begin to pay off all of your debts starting with the one with the highest interest rate. This is the fastest way. If you are able to, transfer your high-interest debts to a lower interest rate loan or credit card.
14. Consult a financial planner or advisor. If you are new to creating a budget and managing finances and don’t feel like you have enough head knowledge, seek a financial planner or advisor. I’m lucky enough to have friends and family who have a wealth of wisdom in this area.
15. Spend your tax refund wisely. A lot of people think of this money as entertainment money and wind up spending everything. But before you purchase that new tv or car, first take a look at your debts, current expenses, the expense for the next and year and even beyond. What is the most optimal way to allocate your funds? Be patient and think strategically.
16. Take advantage of tax credits. All of our expenses for therapies are tax deductible. Knowing how to file your taxes properly really helps. Luckily my wife takes care of all our tax needs since she knows all of the expenses that we incur with regard to autism therapy.
18. Get access to government funds to support therapies to reduce out of pocket payment. This is a huge one! This is really tricky and involves a lot of research and filling out paperwork. Also, there is typically a long waiting period until you hear back from any funding agency. But once you do get coverage, a lot of the expenses for autism will be paid for. BC and Alberta are amongst one of the best provinces when it comes to financial support for autism. Also, a lot of the other expenses such as speech, physio, occupational therapy is actually covered by my employer’s health/medical plan. For kids with disabilities, who are being homeschooled, all expenses are fully paid for until they are 18 years. It’s actually cheaper than public school!
19. Avoid Gambling at all costs. Sure the possibility of winning a large sum of money is attractive. But the reality with gambling is that it is addictive and it’s a waste of time and money. The odds of winning are small and the risk of losing is big. You are better off spending that money on a nice vacation for your family or investing in RRSPs. When it comes to gambling, the house always wins. Stay away!
Autism or no autism, it’s not easy balancing finances. It takes discipline, accountability and sacrifice. God has given our family incredible favour despite all of our challenges with autism. But if you are serious about not being in debt and want to take control of your money rather than it taking control of you, then it’s time to make some changes to your life and how you manage your spending. Start with some small changes to get some momentum going. Before you know it, you will be on your way to financial freedom. I hope you found this article helpful, if not at least somewhat entertaining. Would love to hear from you about how you have balanced your budget. Stay debt free!