Weekend Reading: Conscious Spending Edition

Like a lot of money nerds, I’ve always loved a detailed budget. There’s comfort in seeing where every dollar goes, especially when life throws its usual mix of irregular income and surprise expenses.

Still, I was curious: what would happen if I ditched the details and looked at our finances the way author Ramit Sethi suggests in his Conscious Spending Plan?

His approach is simple: break your spending into four big categories. Fixed costs should land around 50–60% of your take-home pay, investing for retirement about 10%, short-term savings goals 5–10%, and the rest is yours to spend guilt-free.

So, I ran our own numbers through his framework.

Our fixed costs (think essentials like mortgage or rent, insurance, utilities, transportation, etc.) came in well under his guideline at 40%.

We invest 23% for retirement, more than double his suggestion. Most of that is due to our aggressive TFSA snowball catch-up.

We also spend generously on travel and gift-giving, about 22% of our income, while guilt-free day-to-day spending (everything else) is just 15%.

If you combine those last two categories – since travel is our top priority and we pay for it from current income – we land at 37%, right in Ramit’s recommended 25–45% range.

I think the Conscious Spending Plan works well as a quick check-up. It’s easy to spot potential trouble (like fixed costs eating up too much of your pay) or even signs of being overly frugal (investing at the expense of enjoying your money now). I’d use this to get a sense of my numbers before a big change, like buying a house or an anticipated increase (or decrease) in income.

But if you want a more hands-on, forward-looking budgeting tool – something that adjusts as life happens – I still think my trusty spreadsheet wins.

This Week’s Recap:

July has flown by and we’re already in week two of our Scottish Highland vacation. Here’s a quick recap of our last few posts:

I answered a reader question about taking a flyer on a penny stock. Just don’t.

A popular one – why we stopped saving so much and started living.

And, let’s not turn our kids into mini Warren Buffetts just yet.

You might have noticed things look a little different around here. Indeed, we’ve revamped the website for the first time in 10 years (!), reflecting the fact that we’re now a financial planning business with a pinch of blogging on the side, rather than the other way around.

Promo of the Week:

My top travel rewards cards (all with Big Bonuses right now).

These are the cards that power our family’s travel strategy—hotels, flights, lounge access, you name it. They’ve each got elevated welcome bonuses until August 18, and they all play a role in how we book premium trips for (nearly) free:

Marriott Bonvoy American Express Card (Personal)
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Marriott Bonvoy Amex (Business)
Our go-to card for years. Now offering up to 130,000 Bonvoy points. Ideal if you want to keep personal and business spending separate while stacking hotel points fast.
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Amex Platinum (Personal)
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Amex Platinum (Business)
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No, you don’t need to be a big business owner to qualify for the business cards – freelancers, incorporated professionals, or side hustlers all count.

Weekend Reading:

We kick things off with Jason Heath on the tax implications of giving your spouse money to invest.

Next, don’t let a bear market derail your retirement income plans.

A rising number of Canadians are millionaires. So why don’t they feel rich?

“But with that wealth locked into their primary residences, many of these individuals are likely confronting an uncomfortable truth that having a million-dollar net worth doesn’t necessarily mean you are financially ready for retirement.”

The Canadian Investment Regulatory Organization (CIRO) is finally tackling the dreaded account transfer problem.

Tim Cestnick says to consider these top 10 RRIF strategies to save taxes this year.

Canadians accustomed to annual tax refunds may be surprised to owe tax in retirement and have government benefits clawed back.

How mutual fund managers fleece investors through ‘closet indexing’.

Do-it-yourself investing has risen sharply in the last decade and a half. Here’s three ways for advisors to help DIY investors help themselves.

We’ve still got a few more years in the 2020s but this is starting to look like a mini-1980s/1990s back-to-back boom.

If you are currently taking trading advice from Ben Felix on WhatsApp or Telegram, you are being scammed by someone impersonating him:

Worried about financial scams and bad advice? Stick to the investing basics, says Anita Bruinsma.

Finally, if active investing is the loser’s game, what’s the winner’s game? Why disciplined, low-cost, and diversified investing offers a smarter path to long-term success.

Have a great weekend, everyone!