While there's tons of information out there about getting your side hustle on, a budget is not about what you make, it's about what you spend. A budget is a like brushing your teeth, eating healthy or going for a run to get some exercise. It's a form of self-care and leads to helping you reach those financial goals that you deserve. Whether you are looking to become debt free, feel the pride of homeownership, the contentment of living a retirement lifestyle of your choice or indulge your curiosity through travel, you'll need a budget. If you've ever wanted to create a budget to help manage your money, but haven't known where to start, this is for you.
Step 1: Income
Calculate your total monthly income. You need to know how much money you will have each month to meet your expenses. Include your pay, as well as any other money you earn on a regular basis.
Step 2: Expenses
Calculate your total monthly expenses. Take a look at your last three months of spending. Review your account statement and your monthly recurring bills and calculate your total expenses. Break your spending down to:
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"Fixed" expenses (needs) such as mortgage or rent, utilities and buying groceries.
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"Discretionary" expenses (wants) such as dining out, buying coffee and entertainment
Keeping in mind, you ming have additional expenses not listed here, like annual union or professional membership dues, so make you you include those as well.
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Housing (mortgage payment or rent, condo fees, utilities, property taxes)
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Child Care
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Bills
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Loan payments
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Insurance
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Health care & medications
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Food/snacks
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Transportation/commuting costs (gas or public transit costs)
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Clothing
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Cell Phone
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Entertainment & Gifts
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Emergency fund
Be sure to include saving as part of your budget.
Step 3: Balancing Act
Now that you have your income and expenses per month, try to create a balanced budget. You may find that your income and expenses do not balance out at the end of the month and further review of your budget is needed. Go back and look at your fixed and discretionary expenses and adjust your expenses where you can. Check the Financial Consumer Agency of Canada for a budget calculator and other tips on how to make your budget.
At Saven Financial, we're passionate about helping people save. it's why we're committed to delivering a simple, and safe way to save money so our members can achieve their financial goals through smart saving. Check out our high interest savings account and GIC market-leading rates and start saving.