Today is Swagbucks's 2nd birthday! Apparently, this has sparked a website makeover, including changes to their rewards system, so now, instead of earning 1 or 2 swagbucks per search, you will now be earning 10x that amount. Of course, that means the prizes (gift cards, t-shirts, etc.) are now more expensive in terms of the number of swagbucks required to redeem them, but the frequency of wins is increased, as is the number and variety of prizes available.

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How does a person construct a functional budget from scratch?

Many people only learn to budget out of necessity, after having raked up a significant amount of debt and deciding that this way of operating their finances is simply not sustainable. For many, this is an epiphany, but does not answer the question of HOW; as in "how do I make a budget"?

The following steps will aid you along your path to building a functional basic budget.

1. Calculate your actual net pay. There are two basic ways to do this:

1. Take your gross pay, and use a "net paycheck" calculator to work out your net pay (that is your pay after you've paid your income taxes).
2. Figure out how often you're paid and how much, and work out a monthly figure.
   (e.g. if you get paid $1200 biweekly, that's $1200 x 26 weeks / 12 months = $2600).

Now, you have how much you can spend.

2. Make a table with a list running down the left column side of expenses you might incur in any given month. The trick to this is not to make it too specific (e.g. "underwear", "accessories", "makeup", etc.) and not too broad (e.g. "stuff", "bills").

The following is a list of common budget categories, sorted into "fixed" and "variable" categories (you can eliminate the ones that don't apply to you).

Fixed Expenses
Note: these are the ones that you have to pay every month, the amount is more or less the same, and you have no room to play around with the amount.

Rent or Mortgage
Car Payment
Property Tax
Child Support or Other Family Support
Insurance (house)
Insurance (car)
Insurance (life)
Property, strata, or condo fees
Electricity and Water
Child care

Variable Expenses
Note: these are the expenses you can play around with to cut extra weight out of your expense budget, in order to put more money aside or pay down debt.

Clothing
Entertainment
Food (groceries)
Furniture and Home Decor
Donations & Gifts
Transportation costs (public transportation, oil change, repairs, etc.)
Pets
Health and Dental costs
Prescription costs
Phone, cable, internet
Jewellery
Sports or memberships
subscriptions
Personal care
Vacation
Bank Fees

Finally, Make a category for:
Note: these are the ones you want to maximize so you don't have the debt weighing on your shoulder, and so that you have enough saved to have peace of mind.
Debt Repayment
Emergency savings (for when your car breaks down, you get sick, etc.)
Retirement Savings
Savings for Children

Remember, that the quicker you pay off your debt, the less you pay in interest costs.

3. Go through your credit card statements and bank statements, to figure out how much you have actually been spending on these categories to date. Input these figures into the table you have just constructed (in pencil). The actual numbers may shock you.

4. Make another column next to your "actual spending column" to reflect your new designated amounts for each spending category. This is the part that will require thinking - honest, critical thinking. Depending on how much you've been spending, you may find you need to trim a little, or a lot, of your spending. Where can you pare back your spending? Maybe you're spending $80 every friday night with your friends at the local pub, costing you a whopping $320 per month to entertain yourself on friday nights alone. On the other hand, maybe your fixed costs are too high.

Here is a simple rule of thumb for figuring out where you're spending too much money:

Life (entertainment, vacation, fun, buying stuff) should cost - 25% of your net income
Transportation should cost - 15% of your net income
Savings should take up - 10% of your net income
Debt Repayment should cost - 15% in order to be at a manageable level (of course, if you're carrying a crazy amount of debt, you may need to up this amount, and trim in the other areas).

While these are widely accepted numbers in the personal finance community, depending on special life circumstances, the percentage figures can be difficult to follow strictly.

For example, when I graduate from law school, I will likely be spending 50% or more of my net income on debt repayment, for at least the first year - because otherwise, it will take me a good portion of my life to pay the school debt off.

What problems do you have with these guidelines?

Krystal at Give Me Back My Five Bucks is having another contest/giveaway! Head over to her post here to find out how you can enter to win a copy of Quicken Cash Manager 2010.

You can post on your blog for one entry, comment on her post for another entry, and tweet about her post for yet another entry! Hurry though, because the contest ends on March 2, 2010.

Because I've been back in my hometown doing interviews at law firms for the past week, I haven't really had to splurge on any groceries. As it stands, I've only spent money on that first grocery shop of the month, so I am still way under budget, at only $34.74 for the month. Of course, that doesn't include my eating out budget, of which I've spent $21.74 altogether this month, still leaving me with $3.26 or so (perhaps for a cup of hot chocolate or something)!

I'm really happy with my underspending, however, I realize that it's because of the special circumstances surrounding this month (interview this past week, and a week off from school starting tomorrow).

It looks like I won't be spending much more on groceries this month.

On the other hand, I bought a nice black suit at Banana Republic, a black blazer, and a black leather briefcase, all of which added up to $625, which is a whole $625 above and beyond what I had budgeted for clothes this month :$

I guess I'll have to make up for that somehow, although... they were definitely necessary items given the nature of the field I'm going into.

So, the big law firm I had my eye on, decided not to offer me a second interview, which would have been a reception dinner and a chance to further sell myself to the firm partners and associates. I have to say that I am very disappointed. I actually got the voicemail message, blinked, and then cried. It was of no consolation that they thought "I was very well qualified, and would like to flag my application for review in the future for an articling position" - I suspect they've uttered these words to nearly every applicant they've turned down.

Why did I want to work at this particular big law firm? In addition to the "soft" factors, like the wonderful people who I met, and the various and diverse practice areas, the pay and benefits would have been nice. Here is a small comparison of Big law firm and the two smaller firms I am still in the running for:

	Big Firm	Small Firm
Summer Salary	$850-880/wk	$700-750/wk
Articling Salary	$880-910/wk	$750-800/wk
YR1 Associate	$67,000/yr	$45,000-55,000/yr
YR2 Associate	$75,000/yr	$55,000-65,000/yr
YR3 Associate	$90,000/yr	$65,000-80,000/yr

However, just as I told my housemate yesterday when she found out she didn't get the country she wanted for her 3rd year exchange, everything happens for a reason, even if you can't see or understand the reason right this moment.

8 of the 15 firms I applied to never even responded to my application. In fact, I just found out this is typical of smaller law firms, who get hundreds of applicants, yet don't have the resources to screen, evaluate, and actually respond to unsuccessful lawyers-to-be.

I have 2 more interviews tomorrow, so I can't really let myself get caught up in the past. What's done is done. There is still more to power through.

I'm heading into my first job interview at a law firm tomorrow morning, and then having my most important job interview at my favourite firm in the afternoon. You can rest assured that I have spent the day researching and preparing for these two interviews. I thought I'd share some of the most salient features and points I've picked up throughout my preparatory endeavours. It is for this reason that I call this article "Law Firm Interview Do's and Don't's".


Before the Interview, Do...
1. Shower, wear deodorant and pop a breath mint before hand. This cannot be stressed enough. If you radiate body or breath odor, the interviewer(s) will likely not be able to focus on much else.
2. Practice your "firm" handshake. Firm as in strong, not firm as in "law firm". Limp handshakes are not only physically disappointing, but some firm recruiters actually believe that they are an indication of the type of personality (strong or weak) that a candidate brings to the firm.
3. Pump yourself up. Remember that the very fact that you got the interview indicates that the firm believes you to have the intellectual capability to do their work, now they just want to see that (1) you can persuade them of this in person, and that (2) you are as sociable/socially capable as you are attractive on paper.
4. Pack emergency supplies: toothbrush and toothpaste, mints, pantyhose, a pair of "outdoor shoes" if it's winter, some cash (for parking, food etc.), tissues and hand-sanitizer (especially if you're sick).
5. Look like a million bucks. I'm not saying spend a tone of cash, but keep in mind that your hands and your face may make or break a deal. Dirty or callous hands and/or fingernails are really off-putting to a potential employer, so make sure your nails are trimmed and filed, your hands are moisturized, not scaly, and make sure your face is groomed and clean.

During the Interview, Do...
1. Make eye contact, but don't stare or be creepy about it.
2. Be a Better Version of Yourself. You've already managed to land the interview, so just smile, be polite, and turn every question which potentially prompts a negative response into a positive (i.e. if the interviewer asks what your weaknesses are, point out some "positive weaknesses" such as perfectionism, overanalytical, and detail oriented to a fault).
3. Smile, and be positive about your experiences. Avoid making negative comments about colleagues, past employers or any experiences you've had. Like a person complaining about an ex-lover, these types of comments will only leave the listener or interviewer in this case, wondering whether they will be the subject of future complaints.
4. Thank your interviewers for meeting with you to discuss your candidacy.

After The Interview, Do...
1. Send a thank you note to your interviewers. Thank them for their time and tell them you look forward to hearing from them.
2. Send a thank you email to any articling students, support staff or other individuals who gave you a tour, spent time discussing their own experiences with you, or otherwise made the interview more comfortable. Often, these individuals are consulted about their impressions of potential candidates.
3. Keep a journal of your interviewing experiences to help you prepare for future interviews. Think of it as your own personal resource manual. Possible categories to include might be: "jokes or comments that received positive feedback", "problems to avoid next time", "questions that were asked that caught you off-guard", "what people were wearing around the law firm", "qualities or achievements that the firm mentioned or was impressed with".

Don't!
1. Self-deprecate. DO NOT minimize your experiences or achievements in an effort to appear modest. You will only end up appearing to lack confidence in your own abilities.
2. Interrupt. Resist interrupting your interviewers at all costs. You will appear impatient and/or nervous.
3. Fill the Silence with filler words. Umm, like "ummm" and "uhh" and "like". You're not 14 anymore, and it's no longer cute.
4. Wear open-toe shoes if you're a woman, or anything but dress-shoes if you're a man. I know some of you will think this goes without saying, but it needs to be emphasized.
5. Memorize your answers to interview questions verbatim. Instead opt for a more natural approach to answering interview questions, say, by memorize your speaking points (i.e. Why do you want to work at this firm? Memorize "location, diverse practice areas, friendly colleagues, reputation"). You can work out the exact wording at the interview, which will translate into a less robotic, less rehearsed answer.

Are there important preparation and presentation tips I've missed? If so, drop me a line and let me know! :)

This is just a quick post to announce that Krystal at Give Me Back My Five Bucks is giving away a copy of QuickTax 2009, and there are 3 ways of entering the contest! Head over to her blog to check out the details of this fantastic giveaway!

Note that the contest is only open to Canadian Residents.

Sorry for my late post! It's been a hectic week, full of assignments, deadlines, and interview scheduling and preparations, which is all very exciting but also extremely time consuming.

So far, I've got 4 interviews for PT school-year and/or FT summer positions, all are law-related at a minimum.

I have:
-2 interviews at medium size firms in my hometown
-1 interview at a MEGA law firm in my hometown (200+ lawyers at this one firm)
-1 interview for a job in the government (this is the one I recently wrote an exam for - with a 10% pass rate!)

Well, I had the government interview this morning, and it went well, but they only gave me 10 minutes to prepare to answer 6 questions, which were convoluted and required long, detailed explanations. I did my best though, so we'll see how that turns out! :)

As for the other interviews, there are still 8 firms I haven't heard from at all, so I'm keeping my fingers crossed :$

I can't wait for all of this to be over, provided of course that I end up with a job! :)

I know I already posted today, but I just redeemed my swagbucks for $20 worth of Amazon.com gift certificates using my Swagbucks points, and I've been signed up with swagbucks for only a few months.

All I do is conduct some of my internet searching through the swagbucks search toolbar each day (which you can sign up for and download here). I rake in 1 or 2 swagbucks each day on average. So far, I've redeemed 180 swagbucks, or $20 in gift certificates!! And this is all without referrals or taking on a lot of promotion activity.

This is pretty crucial to achieving my money saving objectives, since this means I can order stuff (personal items, books, music, etc on the amazon.com website) all using these e-gift certificates I've earned, and then put the money I would have used to buy those away for a rainy day!

You can check out Swagbucks and sign up for it by clicking on the banner below:



Enjoy! :)

For a few years now, I've been following and learning from other PF bloggers who emphasize the importance of learning basic investment principles, and the difference that investing your own money can make (i.e. purchasing your own stocks) vs. letting someone else invest it for you (i.e. buying mutual funds).

The major difference I perceive is that, when I contribute to my MF account and the unit price for that MF rises, I don't have the ability to pick and choose which of the stocks that forms that MF I'm going to keep and/or sell, as they all come in a neat little (indivisible) package.

I've also experimented with stock market simulation websites such as Stocksquest, and barring any emotional attachment/overpowerment, the simulation indicates I would be able to obtain a much larger return on my investments than if I bought Mutual funds.

So, Yesterday morning, I went to Scotiabank to open a trading account. The representative advised me to open a TFSA account from which to purchase stocks, saying that any capital gains would be exempt from taxes, as long as I didn't exceed the $5,000 contribution limit for the year. Little did I know, however, that the contributions I've already made this year to my Tax-free mutual fund account with ING direct actually counts towards the TFSA contribution limit.

Overall, this means, I have $3,247 left that I can contribute (or invest) through my Scotia TFSA.

I also decided on a few books I'm going to be buying in order to prepare to begin investing my own money. They are:

• Intelligent Investor: The Classic Text on Value Investing by Benjamin Graham
• Get Smarter: Life and Business Lessons by Seymour Schulich
• Warren Buffett and the Interpretation of Financial Statements by Mary Buffett and David Clark.

The total for these three books at Chapters.Indigo.ca comes to $51.85, but because I'll be redeeming some of my airmiles for a $50 Chapters Indigo gift card and shipping on orders of $39 is free, I will only be paying $1.85. The money I had originally allotted to buying these books ($25 out of my budget) is now going to be redirected to savings.

I'm looking forward to reading these books and gleaning the little nuggets of information that, in my mind, will turn this $1.85 investment into much more in the long term :)

So, this morning I had a cup of Hazelnut coffee I had left over from last month (with chocolate soy milk for foam), two pieces of whole wheat bread with peanut butter (still using my $0.99 jar!) and a few scoops of Activia yogurt.

Then I went shopping to replenish food supplies...


Items I bought today:
-sweet onion
-3 golden delicious apples
-flax bread
-caramel dip
-2L skim milk
-2 x 650 g Activia Strawberry yogurt
-egg whites
-1 box of Dare chocolate chip cookies
-3 packs of Mr.Noodles
-Grillem's cheesy sausages
-medium container (450 g) of Chili with bun
-medium container (450 g) of penne with meat sauce

Total for this grocery shop = $34.74

Total for this month = $34.72/$80

While I was originally going to post today about the progress made on my February challenge, there is as of today, nothing to report. I have not gone grocery shopping yet; instead, I am subsisting solely on food already in the fridge and pantry (including that $0.99 jar of peanut butter I mentioned in an earlier post). Mmmm peanut butter...

But I digress...

I am posting tonight only to announce these cool ninja hook coat hangers being given away by Spinning Hat, and hosted by Fabulously Broke here. So make sure to visit and get as many entries in as possible!

As for my February 2010 anti-resolution challenge, I'll be posting again tomorrow night about the $80 I've allocated towards groceries for this month, but have yet to dip into!