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October 06, 2021 | By: Adriana Molina

How Much Money You Should Spend on Monthly Expenses

Budget Planner

It can often feel difficult to keep track of what we spend in a month. Having a budget helps you easily see how much money is coming in and how much is going out. However, many wonder how much they should be spending on various monthly expenses, such as housing, transportation, groceries, and more. 

How much should I spend a month? 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 some basic information on how much you should be spending on different kinds of expenses, tips to help you budget monthly costs, and explain 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. What we spend in a month on different expenses will change dramatically depending on things like income, family situation, inflation, and even where we live.

The following information can be used as a basic guideline and not a hard rule. If you need more specialized help on setting your monthly budget or determining your average household expenses, you may want to seek out a financial advisor or debt relief service provider.

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One thing to note: We're going to be basing our estimates on the median after-tax income of Canadian families, which was about $66,800 a year in 2020 (Source: Statistics Canada)—the most recent data set made available by the Statistics Canada website at the time of this writing. That works out to about $1,284 a week or $5,566 a month. Again, this is just a median income for Canadian families and unattached individuals across all provinces and age groups. So, any values provided here will need to be adjusted based on your own personal income and living situation.

For example, if you live in an area with above-average housing costs, it may be necessary to increase your expected spend on housing beyond the estimates listed in this blog (or to downsize your housing).

9 Common Monthly Expense Categories

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

While the Statistics Canada median income estimate of $66,800/year is supposed to be “after taxes,” provincial taxes and other region-specific costs may cause some extra variability. So, your net income (i.e., your “take home” pay) may be somewhat more or less than the $5,566/month that the median income would suggest.

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 monthly living expenses, sitting at a median of about $1,948 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 may consider cost-saving solutions like getting a roommate to lower your monthly housing expenses (by splitting the cost of housing), supplementing your income by renting a room or floor in your home (if you own it or are allowed to sublet), or AirBnB-ing your place when you are not there. 

2. Food

About 15% of most people's household budget (or around $835 per month) should go 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.

This is one of the spending categories that can most easily slip beyond our control since we often make extremely small but frequent purchases that add up over time. For example, if you get fast food, you could easily spend $15 on a single meal. This would purchase about 55 meals before running down your monthly budget. So, while the pinch on your wallet for any single meal isn’t big, it’s easy to fall into a pattern of overspending on food.

3. Transportation

When it comes to the cost of transportation, it depends on how you get around. Most people spend about 15% of their budget, or $835 on car payments, insurance, fuel, maintenance, parking, transit passes, and taxi or Uber expenses.

However, if you own a vehicle, it’s also important to keep in mind the need for vehicle maintenance. Regular maintenance, like oil changes or replacing parts as they wear out, can cause your monthly spending for maintenance to spike well above the normal amount for a single month—which can cause problems for your monthly budget. This is one reason why it can be helpful to keep a reserve of money in the bank to cover unexpected costs.

If you live in a metropolitan area with good pedestrian access or public transit, then you can save a bit on your household budget by avoiding vehicle ownership. Instead, you might get a bus pass or rely on other forms of public transportation to get where you need to go. This is an especially useful idea for Canadians who work from home and don’t need to commute to work on a daily basis.

4. Utilities

Utilities typically account for roughly 10% of most Canadians' monthly living expenses (about $560 per month). These expenses can include everything from hydro and gas bills to cell phone, landline, cable, and internet bills.

5. Debt Payments

Many people spend 10% of their monthly income on debt (or about $560 per month). This includes credit cards, payday loans, auto loans, student loans, and lines of credit. However, if you’re suffering from excessively high debt, you may find yourself spending more than this just to keep up with your monthly minimums.

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6. Personal & Discretionary

Most Canadians spend about 5% of their monthly household budget, or $280, 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 other 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 another 5% of their monthly income, or around $280. 

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, car repair, 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% of our monthly budget, or around $140 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 $140.

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 household budget to 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). 

Of that $10,311, the majority ($7,536) was spent on food purchased from grocery stores while the remainder ($2,775) was attributed to restaurant food purchases. Here’s the thing: the recommended monthly spend on food was $834, and this average per household spend on food works out to $859/month on food—just $25 above the recommended budget for 2020.

This indicates that the average Canadian family is operating at a deficit on their monthly food budget—which cuts into their budget for other monthly expenses or forces them to take on small amounts of debt to make up the difference.

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. In Canada, the average cost of a pack of 20 cigarettes is $12.33. If you smoke one pack a day, that would be about $86 (rounded down) per week, $370 per month, or about $4,500 per year spent on cigarettes. That’s an enormous burden off of your annual budget if you can manage to quit smoking.

Plus, by not smoking, you can avoid certain health complications that can impact your budget as well.

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) by 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% of our wardrobe? So, why not cut your clothing budget to 20% 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 for brand-new threads and buy second-hand (or even just rent) instead. This is one way to help minimize your monthly spending on clothing while still looking your best. 


On average, Canadians spend about $190.98 per month (or $2,292 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 when you’re out in public.

Mortgage Debt

Mortgages make up nearly three-quarters of the $2 trillion of debt held by Canadian households. While a mortgage is often seen as a form of “good debt,” since it means that, once paid off, you’ll have a valuable asset in your personal finance portfolio, it can make maintaining your monthly budget extremely difficult.

If you find that your mortgage payments are more than your household budget can support each month, then it might be time to look into options like refinancing your home, selling it off and moving to a smaller, more affordable home, or renting out space in your home to supplement your income. Before taking any of these actions, it’s important to speak to your financial advisor to find out if the potential rewards are worth the short-term costs.

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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