October 06, 2021 | By: Adriana Molina

How Much Money You Should Spend on Monthly Expenses

Budget Planner

We’ve been talking a lot about the importance of creating a personal monthly budget lately. While having a budget helps you easily see how much money you have coming in and how much you've got going out, many people wonder how much they should be spending on various monthly expenses, such as home, transportation, groceries, and more. 

“How much should my monthly expenses be? What are the average monthly living expenses in Canada? What are some tips I should follow on how to budget monthly expenses?” These are all common questions that people might have about monthly bills and living expenses.

In this blog, we’ll provide the 411 on how much you should be spending in each category, tips to help you budget monthly expenses, and explanations of common living expenses. 

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It should be noted that the answer to the question “how much should I be spending a month” can vary. How much you should spend on different monthly expenses will change dramatically depending on your income, family situation, and even where you live. So, we recommend that you use the following information as a basic guideline. If you need more specialized help on setting your monthly budget percentages or determining your average household expenses, you may want to seek out a financial advisor or a debt relief service provider.

First things first: We're going to be working with the average Canadian salary, which is about $62,900 a year (or about $1,209 per week). Again, this is just an average across all provinces and age groups. For example, the median after-tax income for non-senior families was $93,800 while the median after-tax income of female lone-parent families was roughly $52,500.

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9 Common Monthly Expense Categories

In our free Budget Planner + Expense Tracker, we break your spending down into four main monthly expense categories: Housing, Living, Work, and Personal expenses, and each of these categories can have various subcategories.

Now, if we're working with the average Canadian salary, which is $1,209 per week, that works out to about $4,836 per month. But we need to pay taxes, so we need to base our monthly budget on our net income, also known as take-home pay. So instead of having close to $5k to work with on a month-to-month basis, we actually only have about $3,937 for all of our monthly expenses. This, of course, varies from province to province due to different provincial tax rates.

So, how much should you spend a month on each type of monthly expense? Using the average percentages most experts agree on, here’s how your money should be spent each month.

1. Housing

At 35%, housing accounts for the bulk of your average monthly expenses, sitting at a median of about $1,378 per month. This includes monthly bills for mortgage or rent, property taxes, insurance, etc. 

Depending on the city you live in, it could be very difficult (or impossible) to stay within this budget, so you can consider things like getting a roommate to lower your monthly house expenses (by splitting the cost of housing), supplementing your income by renting a room or floor in your home (if you own it), or AirBnB-ing your place.

2. Food

About 15% of most people's household expense budget (or around $595 per month) goes to the food category. This includes groceries as well as personal care/household items purchased at the grocery store, like cleaners, toilet paper, and shampoo.

3. Transportation

Are you wondering “How much should I spend a month on transportation?” How do you get around? Most people spend about $595 per month, or 15% of their budget, on car payments, insurance, fuel, maintenance, parking, transit passes, and taxi or Uber expenses.

4. Utilities

Utilities, about 10% of most Canadians' monthly living expenses at $394 per month, can include everything from hydro and gas bills to cell phone, landline, cable, and internet bills.

5. Debt Payments

Most people spend 10% of their monthly income on debt (or about $394 per month). This includes credit cards, payday loans, auto loans, student loans, and lines of credit.

6. Personal & Discretionary

Most Canadians spend about $198 per month, or 5% of their monthly expense budget, on personal and discretionary items. This includes haircuts and personal grooming, entertainment (like going to the movies or dining out), tobacco and alcohol, gaming, and hobbies.

7. Savings

Regardless of how much or how little you earn, you should always be squirreling away some of your monthly take-home pay for yourself. For most Canadians, this is about $198 per month (or roughly 5% of their monthly income). 

However, paying off debt should take priority over short-term savings (like saving money for a vacation or a new phone) because of the interest it accrues. On the other hand, a long-term emergency savings fund is very important to establish so you don't have to resort to using your credit cards or taking out a payday loan if an emergency ever arises—like an unexpected vet bill or job loss.

8. Clothing

Most of us don't have enough time to go shopping every month (and that's a good thing), but averaging our spending throughout the year brings this living expense category to 2.5%, or around $99 per month. So, while it’s not one of our official monthly bills, it’s a form of spending that needs to be accounted for when you budget monthly expenses.

9. Medical

In Canada, we're lucky to have our healthcare system, but we still need to cover costs like dental work, glasses, and contact lenses; specialists like optometrists, physiotherapists, and chiropractors; and other over-the-counter medicines. This eats up another 2.5% of our monthly income, or about $99.

This spending category might see strong fluctuation from month to month, as average monthly expenses for healthcare can vary depending on whether you are currently suffering from injury or illness.

Categories Causing Canadian Debt

It can be a bit difficult to generalize about the sources of debt that people accrue. Not everyone has the same monthly expenses or living costs. 

For example, some people don't have a monthly car payment. So, because they have fewer transportation expenses to worry about every month, they might spend more in another monthly expense category, like housing or clothing. 

Despite our best efforts, some spending categories can be real budget-killers—those areas where we’re simply spending too much. So here are a few suggestions on how to reduce your monthly expenses.


One thing is for sure: Canadians love to eat! One of our favourite past times is dining out, which we all know can blow your budget into smithereens. But grocery shopping isn't too far off, either. The average Canadian household spent about $10,311 on food in 2019 (Source: Statistics Canada). 

If you want to cut down on your grocery bill and save on monthly house expenses, embrace couponing, price-matching, shopping at discount produce and grocery stores, purchasing less pre-packaged foods, and/or using a smartphone app that offers cash back on your favourite food items and grocery stores. 

Personal and Discretionary

Personal and discretionary expenses, like grooming, entertainment, and gym memberships can really add up. So, instead of going out, consider having a girls’ or guys’ night in, and doing free or close-to-free activities, like hiking, visiting museums, or seeing a local band. 

Also, if you smoke, quit. Besides the enormous health benefits, quitting smoking can yield huge financial gains too. If you smoke a 200-pack a week at $140 a pop (or an average of 1.8 cigarettes per hour for 16 hours a day), that’s around $560 saved on this monthly living expense. Even if you only smoke at half that rate, you’d still save about $280 a month!

Household Operations

There are a number of ways to cut these household expenses down. For example, did you know that washing clothes or dishes after 7 pm during weekdays or anytime during the weekend can save you money? 

Also, turning the thermostat up or down (depending on the season) just a couple of degrees, especially when you're not at home, can save you money month-over-month. Additionally, consider things like caulking your windows, weatherstripping your doors, and topping off the insulation in your attic to save on your energy bills. These small improvements can be a lifesaver for your monthly living expenses.


Did you know we only use about 20 per cent of our wardrobe? So, why not cut your clothing budget to 20 per cent as well? Don't think it's possible? Try it for just a couple of months by visiting top-notch thrift stores and looking online for gently-used clothing and footwear. 

Especially when it comes to clothing you'll only wear once, like holiday party dresses or wedding attire, don't fork out the cash and buy second-hand (or even just rent) instead. If you're posting pictures on social media, you may not want to reuse an outfit. You'll save a bundle. 


On average, Canadians spend about $190.98 per month (or $2,291.76 a year) on communication expenses. Cut this cost by negotiating a lower monthly plan with your provider or switching to a cheaper one, and purchasing gently-used second-hand cellphones instead of buying brand new models the day they come out. You can also cut down on your internet usage and avoid overage charges by using free wifi whenever possible. 

While using a Budget Planner is a great step in gaining control of your finances, it also helps to know how much you should be spending. If you're finding it difficult to make ends meet, or just want some free financial advice on how to make your budget work better, contact us today and we'll set you up with a free counselling session with one of our expert credit counsellors.


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