Tag Archives: Budget

My Life On Welfare

First thing’s first, don’t worry mom, I’m not applying for welfare.

I was recently reading an article about a company that is doing a “SNAP Challenge“. As far as I can tell, these people were going to live on the equivalent of food stamps for a week to see what it’s like. This got me thinking about the 5 Days for the Homeless campaign that happens annually across Canada (and right here in Winnipeg).

When I saw the comments at the bottom of the article I started thinking even more about the similarities. Things like, “This isn’t how real people on food stamps live,” and, “This is insulting,” and, “This is a publicity stunt.” It was like a blast from the past, because I’ve heard all of them said about 5 Days, as well.

To set the record straight, all these participants know that this isn’t real-life, but an exercise. I can’t speak for the SNAP Challenge people, but 5 Days only wants to raise money (over $25,000 this past year) and awareness. Excuse me for being blunt, but only a complete moron would think that these participants are claiming to know what it’s like to live the lifestyle which inspired the charitable endeavours.

All of that being said, I started wondering to myself if I could live anything close to my current life on welfare. Then I started doing some digging.

Disclaimer: I didn’t take too long finding this info and I’m sure there are some intricacies. This was just done as a mental exercise for myself (and now you) and I don’t claim to know what it’s like to be on welfare.

I found that the assistance provided in Manitoba is $587 for a single person, so the short answer is right away “no”. Mortgage payments, home-owners insurance and personal insurance eat that up and more. Case closed.

Not wanting to stop right away, I decided to see what it was like if I cut out all of the above and assumed I was an uninsured renter.

I also assumed I could find a place to rent for $350/month and could access a housing allowance for 50% of that cost. My remaining fixed expenses were car insurance, cell phone bill and cable/internet. After the above four things I was left with about $177 per month for everything else. Maybe possible, but not ideal.

Then, again a step further, I decided to cut out the data on my phone plan, cut cable and internet, “sell” my car and get a bus pass instead. Assuming I was still was paying $175/month on subsidized rent my leftover spending money would be $327/month. Let’s work with that number for now.

A rough budget for living on $327 discretionary income per month for me would look like this:

  • $200 food ($127 remain)
  • $70 utilities (giant leap here, but thought I should put something) ($57 remains)
  • $57 everything else

I fought my natural urge to put something in savings, because I just don’t think that’s realistic.

The $200 for food may have some room to be trimmed down, but as it is that’s $6.67/day for meals. If you want to get any sort of protein, ever, it’s going to have to stay where it is. I know there’s people who have blogged about living on a dollar a day for food, but even they have admitted it was very unhealthy.

It may seem silly, but this was actually fairly eye-opening for me. Before taking the time to break it down I didn’t really understand what it meant to be on social assistance. Looking at it this way, you wouldn’t really have choice with your money. After the most basic human needs are met you’re pretty much out of cash for the month and I’m guessing that would really wear on a person.

Stop Playing Catchup With Debt

This is going to sound very “fuddy-duddy” of me, but I think at some point in the last half-century, western society became much to comfortable with going into debt. I heard from a young age, and it’s always stuck with me, how the only acceptable reason to go into debt is for your house. While I would add a few reasons on there (education and starting a business), it’s something that I have always tried to remember.

Though my early learning about money was to be very conservative, and I admit when I was out making my own I rebelled a little bit, that original lesson about debt stuck with me. When I would be getting short on funds and the temptation struck to just throw it on my credit card, the old lesson usually stopped me.

Deconstructing debt into it’s most basic form, it’s paying for the opportunity to borrow money that isn’t yours. Doesn’t matter if it’s a bank, credit payday loan, credit card company or loan shark, it’s all the same. It essentially solves a short term problem, but has long term consequences that are usually not considered at the time. This is because we either can’t or won’t understand the decision process for borrowing money to purchase something.

To me, the biggest misconception about the majority of purchases that are done using debt is that they are analytical in nature. We rationalize to ourselves the reason we are going into debt makes the most sense out of our options and prove using logic that we are “able to handle it” because we know we will make enough to cover payments. While this is all good and fine, I would argue that in a large majority of times we choose to go into debt, it is an emotional decision.

It is this emotion that pushes us to take the short term satisfaction and ignores what it means in the longer term. We look at this one transaction and how it will make us feel, rather than how it will affect our lives for months or years to come. It is for this reason that once we start, being it debt becomes a pattern that is difficult to break.

How it works is that you borrow once to make a purchase. The happiness that this purchase gives you does not last as long as it takes to pay it off, therefore you are stuck in debt and no longer as happy. Then, before you are able to get out of debt and save money, you see another item which will make you temporarily happy, borrowing more to purchase it. All the while paying interest on the amount that you borrow, which reduces your overall spending power, i.e. how much stuff you can buy.

Ironically you are able to do and buy more if you stay out of debt and avoiding interest costs. It may be a sacrifice, but saving the money first, even if it’s small amount, not only allows you to be in control of your budget, but also gives you more of a sense of satisfaction when you are able to make the purchase. Knowing that you don’t have to worry about any consequences, along with the added sense of anticipation (which I believe is often better than the payoff) you are able to enjoy the decisions you make with your money more.

As a final thought, I know there are other extreme circumstances that there is no way to avoid debt. I know that if I were to get ill tomorrow with something that needed to be dealt with and my insurance wouldn’t cover it, I would not think twice about borrowing as much as I can to help myself. Just consider where I would be, however, if I had already borrowed all that I can to make unnecessary purchases. The peace of mind knowing that I can take care of myself is worth any purchase I can make now.


I’ve been told by certain people (not naming any names) that I’m a little obsessed with budgeting. Admittedly, it’s not “normal” to be tracking your spending on a spreadsheet from your phone, as you leave the store and walk to the car, but what can you do? We all have our obsessions and this is one of mine.

I maintain that at least my compulsion is a hyper-productive one. A habit that allows me to stay one step ahead of myself, and have comfort in the decisions I do make with my money. I think that this is something that young people tend to discount.

Unless you have more money than you can possibly spend (lucky you) or so little that you don’t have the luxury of making choices as to what to buy (sorry to hear it), it seems from my non-scientific observation that budgeting isn’t a high priority. Many young people, me included for a time, know the rough amount of money they have in the bank, therefore know roughly how much they can spend. This is fine, so long as you manage to keep your loose rules straight and your assumptions are correct. If not, it could lead to some serious problems.

You see, for me, while my acute money tracking may seem like an insane obsession from the outside, it is quite the opposite. I spend a few minutes every day reviewing and updating a spreadsheet, make a quick mental note on where I am with my “fun” money for the week and then not worry about it again until the next time I sit down with it. It’s that simple.

While tracking your finances to the level that I do may not be your thing (or may make you question my level of sanity), I think that creating a budget is something that everyone can and should do. It sounds very grown up, and even hard, but it’s not as difficult as you may think.

It really just comes down to simple math:

  1. Take what you earn, subtract your fixed costs (rent, phone bill, car insurance)
  2. Determine your savings needs (retirement, going on a trip, new tv)
  3. With what’s left over reasonably project your spending

It’s important to do the above in order! Many people reverse numbers 2 and 3, budgeting what they would like to spend and saving anything that is left over. This is dangerous, because we would always want to spend more, but the reality is that ensuring you are saving enough for your future is more important that a few extra meals out with friends.

If at the end of the month, you have run out of money or have more left over than you thought you would, then revisit your budget and make some adjustments. Either tighten your belt or allow yourself some more room. Do this and see the stress of having to ask mom and dad for money to cover rent melt away!