March 2024 - Budgeting 101
Be honest, how many of us cover our ears when we hear the word budgeting?! Like it or not, everyone needs a budget.
The first step is to document all of your household income and expenses.
BUDGETING 101
Gives you better control of your finances. Helps you make the most out of your money.
What’s a budget?
A budget is an estimated number of expected household income and expenses.
Allows you to have specific action steps towards paying off debt, savings or planning for personal projects.
Takes the stress out of your finances.
Developing the habit of budgeting is one of the best financial moves you could ever make.
Budgeting:
INCOME
- Pay cheques (part-time or full-time)
- Child support
- Government benefits
- Social assistance
- Disability benefits
- Side hustles
- Etc.
EXPENSES
- Rent/Mortgage
- Utilities
- Car payments
- Childcare
- Groceries
- Personal care items
- Insurance
- Etc.
The next step is to review your numbers.
What’s the difference between your income and expenses? Are you in the “red”, that is, expenses are more than income?
Categorize your expenses – needs (necessary for you to live) and wants (not necessary but you like to have).
Can you reduce or eliminate your “wants”?
Do you need additional income?
Based on this budget, identify some possible short-term and long-term goals, eg, paying off debt, building an
Having a budget in place helps to prevent overspending, and it ensures you meet your financial obligations.