Budgeting basics

Budgeting Basics

Take control of your spending with a customized and carefully-considered budget.

Whether you're planning your first budget or re-evaluating your current one, these tips will help ensure your success.

  1. A budget isn’t meant to scare you into saving or shame you into a more frugal lifestyle – it’s about knowing where your money’s going. Knowledge is power and once you know where your money goes, you’ll be in a better position to use it, save it and enjoy it.
  2. Your budget is about you – no one else. Everyone has different priorities and needs, so don’t base your budgeting success on the example set by someone else. Sample budgets you find in books or online can be helpful guides, but it’s important to use them with flexibility. It’ll take some time, and some trial and error, to get to a budget that fits you.
  3. Consider taxes and other deductions when calculating your income. These will be listed on your paycheque. If you use your hourly wage or your monthly salary without factoring in these deductions, your budget is going to make it look like you have a lot more spending money than you actually do.
  4. Pay yourself first. Don’t short change your savings – factor it into your budget with the same priority as your phone bill, utilities and other expenses. This will avoid ‘accidentally’ spending your savings on something else, which will make your nest egg grow much more quickly.
  5. Look at your budget, not your balance. The amount of money you have in your chequing account can’t tell you anything about your upcoming expenses. If you’re considering a purchase and you’re wondering whether or not you can afford it, your budget’s going to be a better guide than your account balance.
  6. Expect the unexpected. Emergency expenses can break even the best budget, so it’s best if you prepare for them. Put part of your savings into an emergency fund and try to anticipate unexpected expenses. Home maintenance, car repairs, vet bills and many other expenses can come as a surprise even though they’re inevitable. Don’t let them catch you by surprise – plan them into your budget.

If you have questions about budgeting, saving or anything else, call our Contact Centre at 1.866.863.6237.