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  • What You Need to Do After Completing Your Personal Budget Planner

    What You Need to Do After Completing Your Personal Budget Planner

    Gursh Singh

    If you’ve been following our blog, you’ve probably noticed how much we’ve been stressing the importance of a personal budget planner. And for good reason! A personal budget planner can help you:

    • Cut back on expenses

    • Manage your debt repayment

    • Build an emergency fund

    • Work as a team with your partner to achieve financial goals

    If you’d like to hear more about this, check out Why You Need to Be Using a Personal Budget Planner. And if you’ve already completed one, congratulations! Here’s what to do next:

    4 Things To Do With Your Budget Planner

    Start Making Cuts

    Armed with your completed budget planner, you should now have a clear view of what’s coming in and what’s going out each month (and what it’s going towards). This can help you better plan your spending throughout the month—plus give you ideas on where you can cut back. For many, this means no more living paycheque to paycheque, and certainly no more of those dreaded and highly expensive payday loans (don’t do it!).

    Whether it’s finding a cheaper cell phone and internet plan or getting rid of a gym membership you no longer use, little savings here and there can really add up. Don't believe me? Check out our Budget Calculator—it can be a real eye-opener!

    Manage Your Debt Repayment

    Hopefully, you’ve decided where you can make some cuts so you can start putting more money towards paying off your debts each month. We know it's tempting to put that “newfound” money towards something—anything—other than a creditor, but that wouldn't help you. It would just leave the debt lingering over your head longer. Plus, the more you pay, the more money comes off the principal you borrowed and the less you’ll pay in interest fees, so it’s a win-win!

    There are different ways you can go about paying off your debt, but the two main methods of debt repayment you can do yourself are the snowball method and avalanche method. The snowball method means paying as much money as you can towards the smallest debt, regardless of the interest rate, while maintaining minimum payments on all your other debts. The main benefit of the snowball method is that you'll start to see balances paid off in full faster, which can be very encouraging and help keep you motivated. There’s also the avalanche method of debt repayment, which focuses on paying the debt with the highest interest rate first, while maintaining minimums on the others. The avalanche method can save you more money over time in interest fees, but it can also take longer to see that first balance paid off in full, which can lead to frustration. 

    Build an Emergency Fund

    Paying down debt needs to be your top priority, because debt costs us money each month in interest fees. But after you’ve chosen your repayment strategy and successfully knocked down those debts, it’s time to begin putting money away—not for a rainy day, but for emergencies, and only emergencies! You know, those unexpected car breakdowns, vet bills, home repairs, even a job loss.

    It’s recommended that you save up at least 3 months' worth of your salary and put it into a separate savings account. This account must be separate from all your other savings accounts you have for other goals, like saving for a downpayment, vacations, your retirement, etc. This is strictly an emergency-only account and its purpose is to prevent you from having to rely on your credit cards or a payday loan if an emergency should ever arise, which we know can make a bad situation a lot worse.

    If you’re supporting a spouse, partner, or children, it’s a good idea to up that to 6 months' salary. You might be thinking, “easier said than done!” and we get that—but once you’re completely debt-free, you may be surprised at how easy it is to begin squirreling away emergency money.

    Team Up With Your Partner

    Money issues are one of the three leading causes of divorce (22%), and it often comes down to our money management styles and philosophies. Sometimes one person in a couple will have the mindset of a saver while the other has the tendency to be a spender. However, with a completed budget planner, both partners can see exactly where their money is going—and it’s hard to argue with something when it’s staring you in the face! The budget planner helps resolve conflicts and gets both parties on the same page.

    Hopefully your budget planner has helped you see that by making some cuts here and there, you can begin to dig yourself out of debt. But if you’ve completed your budget planner and find that no matter how much you cut back you’re not going to be able to put a dent in your debt, our credit counsellors are here to help you. All of our counselling is free and confidential, so don’t hesitate to call us at 1.800.267.2272.


    Topics: Budgeting, Budget Planner

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