Yup, you read it right – budgeting doesn’t have to be difficult. It does take time and effort, but so do other skills that we want to build or improve. You don’t just pick up a guitar and play. You have to learn the notes, the strings, etc. etc. Do you think Joe Carter hit a home-run his first time up to bat? Learn how you can become a budgeting pro and finally make some headway on your financial goals, like getting out of debt or building up your savings.
Why people don’t budget
In my 38 years working in the credit counselling field, I have heard every reason there is for not budgeting. For example:
- I don’t want to be told I can’t spend my money
- I don’t know what my expenses are
- I can’t do math
- It takes too much time
- I don’t know where to start
- I don’t need a budget because I earn good money
- I can’t budget because I'm now on a low fixed income
Do any of these excuses sound familiar? The first step to budgeting is to decide you want to and need to take control of your finances – because you do, we all do! And the good news is you don’t have to call it a budget if you don’t like the word. How does a "spending plan" sound to you? Has a nice ring to it, doesn't it? You also need to realize that your reason(s) for not budgeting is likely just an excuse.
Credit Canada has the tools you need to succeed at budgeting
No more excuses – let’s get started! Your budget can be on paper or online, whatever works best for you. The important thing to keep in mind is that you need to be able to look at and review your budget. Most of us do much better when we can physically see what we're doing. Besides, there is way too much going on in our lives to have our budgets kept in our heads alone. Pull together paper, pens, erasers, a calculator, income stubs and monthly statements for utilities, credit cards, etc. Then, go to our Tips and Tools page to download all the resources you need to plan your budget. (Don't worry, they're all free!)
Start with the Budget Planner
The first tool you should download is our Monthly Budget Planner. You can download it as a Google spreadsheet or Excel file. The Planner gives you a breakdown of all your monthly expenses, broken out into individual categories. It will also show you how much of your monthly take-home pay is going towards different monthly expenses, such as housing, entertainment, personal, work expenses, etc. Once you've inserted your monthly net income into the Budget Planner, it will calculate whether you'll have any money left over by the end of the month. It will tell you if you can expect a surplus or deficit, and by how much.
Look over your monthly budget, become familiar with it and see what information you will need to complete it. To figure out your total income, look up your pay stubs and check all the monthly deposits in your bank account. And don’t panic if you don't have that information on-hand. You'll find a lot of the information you'll need to complete your monthly budget in your monthly bank statements, which you can check online if you do online banking. You can also use your bank and credit card statements to determine a lot of your monthly expenses. To come up with realistic numbers, you can go back a few months and look at older statements to determine a monthly average. Or you can use our Monthly Expense Tracker.
A Monthly Expense Tracker can help you see where your money is going (or has gone)
Again, you can download the Monthly Expense Tracker as a Google spreadsheet or Excel file. This tool helps you track your daily expenses, week-by-week, for one month giving you a monthly total for each expense item. It's a great tool to figure out monthly averages for different expense items, which you can then plug into the Monthly Budget Planner. The monthly expense tracker also let's you compare your actual expenses what you've budgeted for each expense.
By using a budget tracker, you can monitor where you're spending your money. You do this by recording your expenses in the correct week, on the correct day you actually spent the money under the appropriate category. Why is this important? Because you need to know how you're spending your money. After all, you can’t make changes to your budget and financial life if you don’t know what you're doing.
Please note: The purpose of the Expense Tracker isn’t to get you to stop spending your money. The goal of the Tracker is to show you how much of your money you're actually spending and on what. The Tracker can then help you determine all the different spending items and expenses you need to account for and include into your monthly budget. For example, it's really easy to forget about music downloads, Ubers, and snacks you buy at work or when you're on lunch. Also, by seeing your totals for different spending items and expenses, you can decide if you want or need to make changes in some areas of your spending. For many of us, seeing is believing.
The Budget Calculator can help you find ways to save money
If you're looking for extra savings, our Budget Calculator is just the tool for you. It shows you how much money you can save in a month, a year and five years by cutting out simple everyday expenses that you might not even notice. Many of us want to reduce our spending and save money, but we don’t see how small expenses here and there can add up to big bucks. For example, if you were to cut back on daily lunches by just $7, reduce your magazine and subscription costs by $5 a week, and reduce lottery spending by $4 a week, you can save $252 per month. That works out to over $3,000 in savings after just one year and $15,115 after five years! Sounds pretty good, doesn’t it? Use the Budget Calculator to see what savings you can discover in your own budget. And make those savings really work for you by using them to balance out your budget, pay off any debts you have sooner (also saving you money in interest), or saving for future expenses. Consider getting a separate bank account that you can put these savings into, that way you don't accidentally spend it.
Our Debt Calculator can help you get out of debt sooner (and pay less in interest charges)
Our Debt Calculator can show you different ways to pay off your debts sooner and how much money you'll save in the process. All you need to do is plug in all the debts you have and their different interest rates. Then plug in how much money you can dedicate every single month to paying off all your debts. Then click 'Calculate Your Savings' to find out how long it will take you to pay off all your debt using different payment strategies. The Debt Calculator will also show you all the different debt repayment strategies available to you, and how much money you can save in interest using the different repayment strategies. Discover what you can save in interest by changing your payment plan. And remember, once you determine the amount you will be paying on your debts each month you need to include that amount in your Budget Planner.
Yes, you can budget
At Credit Canada, we have all the tools you need to help you take control of your finances. Using these tools will help you see that budgeting is actually a good thing because it can help you achieve your goals, no matter how big or small they are. Leave the excuses behind. If you need further help on a one-to-one basis, our certified Credit Counsellors can help you establish a realistic Budget Plan, as well as a foolproof plan to get out of debt. Give us a call at 1.800.267.2272. Remember, Joe Carter didn’t achieve his success without help from others.