Building a Budget

A budget allows you to take control of your money by tracking how much you're taking in (income) and how much you're spending (expenses). Working with a budget will enable you to plan for future purchases and achieve your financial goals (savings).

It might sound like a lot of work but it's easy and the results are definitely worthwhile. By spending just a bit of time creating a budget you can save hundreds or even thousands of dollars a year. To build a budget you need to assess your current financial situation. This will give you a strong base to build from as you start to learn better financial habits.

The first step in assessing your financial situation is to figure out how you spend your money. Start by tracking your spending for a month. List ALL of your expenses; money you give to your children or other family members, every bill, every credit card expenditure , every grocery receipt, even every cup of coffee!

Also, save your ATM and other incidental receipts. No expense is too small to record. It’s the small expenses that will eventually add up to big savings.

Click here for the Weekly Spending Log worksheet


The Weekly Spending Log lists three types of expenses: fixed, flexible, and discretionary.

Fixed expenses stay the same from month to month - rent or mortgage payments, car payments, insurance, savings and other loan payments fall under this category.

Flexible expenses change from month to month, such as utilities, medical bills, groceries, telephone, transportation, credit card payments.

Discretionary expenses are the ones that fluctuate and are spent using your discretion. They may not be mandatory for everyday living. They may include:

  • Entertainment
  • Dining out
  • Special events
  • Clothing
  • Hair salon
  • Manicure/pedicure
  • Home repairs
  • Car maintenance
  • Charitable donations
  • Cable/satellite
  • Gifts
  • Books/newspapers/magazines

We also recommend you create an emergency fund with enough money to cover three to six months of your basic needs. Fixed and flexible expenses are considered basic needs.

Although you may not pay flexible expenses each month, you should always have some money available in your budget to pay for them when necessary.

Total monthly income

Total monthly income includes any money you receive from all sources:

  • Your salary (after deductions)
  • Spouse/partner’s salary (after deductions)
  • HST/GST credit
  • Alimony or child support
  • Rental income
  • Tips and commissions
  • Child care tax benefit
  • Income tax refund

When you have all of your expenses and income information recorded; subtract your total monthly expenses from your total income.

If you have money leftover it should be included in your savings.

However, if your expenses are greater than your income that means you are spending more than you take in each month. This is a good indicator you need to reduce some of your expenses.

Click here for the Household Budget excel spreadsheet

Expense Review Sheet

Living within a budget means adjusting how you spend your money. Changing habits, especially in the discretionary spending category, will result in saving you money in the future. Budgets are living documents that can be changed at any given time. After a few months of working with your budget take a look at your spending; has it changed enough or do you need to make further adjustments.

Once you have a workable budget in place continue to review it at the end of each month. It will help to keep yourself on track and focused on achieving your financial goals.

Get Help

Having issues with your unsecured debt?

Click Here to find out your options to get back on track by filling out a budget analysis or by calling (888) 213-8678 and speaking to a Trained Credit Counsellor.

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Do you have any questions about your personal finances? We have experts waiting to help you.

Click here to submit your question, or call (888) 213-8678 to speak live with one of our trained credit counsellors.

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