Last week, I was creating my 2014 budget with Cait's budget spreadsheet (thanks Cait!) and checking my credit card statements for more accurate predictions of my future expenses, based on what happened in the past year.

This is part two of my financial planning for 2014. The first part was finding ways to earn more income passively.

I did a budget for every month of the year, totalling it all up in the end.

HOLY F-CK, guys.

2014 is going to be an expensive year.

I'm getting married. I'm going on an expensive honeymoon. That's it, but that's enough. That's all my wallet can handle.

After I came to the sobering realization that I would have to either put all of my savings on hold for the entire year, or do something about cutting expenses, I decided for the latter and got to work.

Line Them Up

Since this realization came out of the exercise of doing a budget in the first place, I had all of my expenses lying in front of me, glaring a me, and begging for me to pick them off.

If you're playing along at home, do the most detailed budget you've ever done. Every single penny that goes out of your bank account must be accounted for. Don't lump your vitamins or cleaning products in with your groceries; actually list these things separately.

(Why? Well, you can't stop eating, but you can cut back on the extras you buy from the grocery store. You can cut back on portions of your bills, if you can't cut back on the whole bill, so be very detailed).

Pick Em Off


Greyed out cells: There are some bills you can't reduce. Your mortgage, any debt repayment you may have (in fact, you should be boosting those payments), different types of insurance. I greyed those expenses out on my budget spreadsheet.

Orange cells: I could most certainly reduce these expenses, but these are more discretionary and where I'd rather see my money go. I would cut back on these as a last resort.

Bold cells: These are the expenses I was focusing on cutting.

Regular text cells: The cells with regular text and a white background are cells that I do plan on scaling back a bit on, but I wouldn't be able to total my savings on them easily because of the way my finances are set up with my fiances. I left them out.

cutting expenses

(I don't have cleaning products or firewood on my budget because my fiance pays for those things, and I pay for the pet food/nail clipping, etc).

Instant Gratification

Right away, I was able to save $75 (instant gratification) on:

  • Phone bill
  • Internet bill
  • Banking Fees

Phone Bill

I have some extras on my phone that I probably don't need, and are costing me $30/month extra. I phoned and got rid of those extras, saving me $30/month right off the bat.

Internet Bill

My brother, who lives in our suite, insists on having the highest speed internet. This is fine with me, because that way we can both be on the internet efficiently, but I don't like the cost. I phoned Telus (my internet provider) and they transferred me to the client retention department.

Since I have been a customer for 4 years, and I wanted cheaper internet, they cut my bill down to $20/month for the next 6 months and $50 thereafter. That saved another $50 off of our bill. Once the six months expires, we'll transfer it to J's name, so he can get the new customer discount.

Banking Fees

I know my fees are only $4.95, but banking fees are such a huge waste of money.

I've had a checking account with ING Direct for years, since I started this blog, and it's free. I cancelled my account with TD so I wouldn't be dinged so much by their insane fees, and it saved me (almost) $5.

(Sign up for ING with my Orange Key - 35611511S1 - and get $25 for yourself).

Instant gratification saved me $84.95!

Slower Process

Because not everything can provide instant gratification, I've decided to cut down in a few other ways, too.

Natural Gas and Electricity

This one isn't hard - we've been pretty bad lately about turning off the lights, and relying on gas heat instead of our fireplace when we're too lazy to light a fire.

I can't let that continue, because I just don't feel comfortable seeing our dollars go down the drain. We experimented over the past month to see how a change in behaviour might reduce our bill and saved just over $60 between both bills.

Health Care and Alcohol

I have amazing benefits with work and as a result, I don't have to pay very much toward health care. The health care item on my budget is for a supplement which I'm not eliminating, but I am reducing it. I am getting the nutrients it provides in my diet at least partially, so I am cutting back the amount that I use by an amount that works out to cost me about $15/month.

I am having a drink free January and am trying to stay sober throughout the first quarter of the year (at least on my own dime). Alcohol is severely dehydrating and my skin and body just can't take it in the winter. That's over $20/month that I am saving (about 2 bottles of wine) but I am rounding down to $20/month.


There are few expenses I hate more than paying for parking. We have to pay for parking at work, but I have been parking in a residential area and walking to work instead, thereby saving the parking expense. However, two times per month I've been parking in the work parking lot, which costs $4.25 each ($8.50 total).

I gave up my parking pass so now I won't have the option to do that.


Just by making a few small adjustments (and spending some time on the phone), I am saving $188.45. Since I rounded down on quite a few of these expenses, it's closer to $200 than $190.

Have you been cutting expenses this year?


An uncertain economy and shaky job prospects are prompting many Americans to start their own businesses. This can be seen in rising female entrepreneurship, where stay-at-home moms and recent college grads alike are pursuing business opportunities.

While determining your own income offers great potential, the proper business structure should not be overlooked. Choosing the best legal structure affects taxes and personal liability, among other factors.

A sole proprietorship (SP) offers a convenient and low cost means to make your business official. Before choosing this structure, you should consider several factors. These include your business model and personality traits.

Here is an outline of SPs and if this legal structure may be appropriate for you:


Sole proprietors do not need to build consensus with investors or other owners. This enables you to make business decisions quickly, which can be a competitive advantage.

Is your local economy in a downturn? You can quickly adjust prices or change suppliers to meet business trends.  If you enjoy control, an SP may be a good personality match.

Low cost startups or self-financed ventures are conducive to SPs. If you need financing, consider that venture capitalists such as Elliott Broidy and banks will often not lend to sole proprietors.

Since SPs can be transferred, selling your business to new ownership is relatively uncomplicated. If legacy is important to you, consider that sole proprietorships cease to exist if the owner dies or is incapacitated. Business assets are liquidated and passed on to beneficiaries in such cases.


From a tax standpoint, net profit or loss is filed on a Schedule C form, which outlines your revenues and expenses. The business income is then simply added or deducted from your 1040 personal tax return, if applicable. This simplicity saves money on accounting and filing fees that cut into profit margins.

In cases of a net loss, your personal income from other sources is reduced, which can cut a tax bill. However, SPs are required to pay self-employment taxes through a Schedule SE form. You can also hire employees within certain guidelines for additional tax breaks.


Working alone offers quality assurance. You are solely responsible for completing the work and have discretion. By accepting the jobs that you feel most comfortable with, liability can reduced.

Despite the potential tax and productivity benefits of adding staff, your liability will also increase. Unlike a corporation, if an employee causes damage or commits unlawful acts, you could be held fully responsible.

It is important to consider this liability when expanding your business, particularly as a sole proprietor. You should have utmost confidence in staff to deal with customers in unsupervised situations.  If this causes anxiety, you may consider incorporating. Although legal risks can be subtle, review your business and determine the exposure to lawsuits.

The financial liability of an SP must also be considered. When business debts cannot be met, your personal assets could be at risk to satisfy obligations.

Will borrowing money be required to build your business? If so, review your personal finances to determine how much is at risk. For cases where a business loss would risk a large portion of your assets, consider incorporating for added protection.

Evaluate Legal Structure as Your Business Grows:

Business needs and operations are dynamic. As employees are added or services change, review your tax and liability exposure.

By understanding the pros and cons of being a sole proprietor, you can make informed business decisions.

The year is coming to an end and the new year of investing is upon us. Before doing anything drastic or not doing anything at all, there are some things you might want to take note of so all your ducks are in a row and so are your investments. That way, everyone can insure a prosperous investment year and avoid any losses.

Are Obamacare Penalties Going to Affect My Investments?

First thing you have to ask yourself is "Do the penalties apply to me?" Well if you already have health insurance through an employer than you have no worries. If not, though, the penalties could affect you. There's a positive note that even if you're not insured for most of 2014, the penalties won't apply to you. Just make sure you're enrolled by March 31, 2014. If you're wondering what the penalty is, the minimum is $95 per uninsured adult and $47.50 per child, which can up to $285 per family. Another catch is you could even be paying more depending on how much you make.

This is where your investments come into play when filing your 2014 tax returns. If you're not covered and decide not to send the money, the IRS could take it out of your tax refund and your taxes are withheld through your employer. But they can't press criminal charges. If your investments are in property, you're safe. But depending on how much you make throughout the year and if you're uninsured this could cause major tax refund issues.

Is a Weaker Dollar on the Forefront?

So far the dollar has remained pretty stable throughout this year. However, as recent years has shown with the market, the dollar loves to plunder and resurface throughout the year. A currency specialist, Samsons Capital's Lewis has said "2014 will be a weak dollar environment." This can lead to "commodity-friendly" investments and stocks of companies that earn income from abroad. This is only is the economy remains sluggish and there are still low interest rates. Preparing with a "weaker dollar" in mind will give you the reserve you'll need when considering making any long-term investments, or deciding to buy/sell throughout 2014.

Use the Seasons To Your Advantage

Seasonal patterns have been known to boost investing gains. One can see that the November to April period is stronger than May through October, of course this does not mean to completely avoid the market or to stop investing after May. This is just a pivotal point to be more aggressive in the winter and spring with the consumer discretionaries, industrials, and materials.  Then in Summer and Fall get more defensive on investing options through consumers.

This strategy has been proven to produce double the returns of the Standard & Poor's 500 index (6.7 percent vs. 13 percent since 1945).

Undervalued Global Brands To The Rescue

Economic recovery has been leaped over in the past year by Japan and Europe. There are powerful global brands that have very little exposure to bigger economies. A good example is the shoe company Adidas, which according to earnings estimates is relatively cheap.  S&P Capital Reports show Adidas earnings projected growth to be twice of what they were last year, compared to the likes of a company like Nike.

One should not let inflation fears guide your whole investing strategy. Just plan carefully and thoughtfully and get the inside scoop on overseas brands and stocks and pick your options with growth in mind.  With the political situation of the debt ceiling coming back again, it's not likely to lead to a default, so this would be a good opportunity to invest in equities. 2014 may be the year you go abroad to make quite a yearly earning.