How to make a budget
22 Feb 2019
Yes, yes, we all know how important it is to make a budget (and to respect it). There are many tools to help you make a budget. Virtually every financial institution offers free interactive grids that make planning easier. No need to start from scratch!
Calculate your income
You should start by adding up all your income: net salary (after taxes), loans, grants and donations from your parents if you are a student, tips, etc. If your income is not the same from month to month, you just have to make a realistic average.
Calculate your expenses
Ideally, you should check your latest bank statements to see exactly how much you have spent in each of these months.
Weekly expenses: groceries, coffee, restaurants, gas, etc. When you have a lot of weekly expenses and you want to know the monthly amount, you have to multiply the amount by 4.3.
Monthly expenses: rent, electricity and gas, insurance, loan repayments, public transit, telephone, cable, Internet, etc.
Annual expenses: driver's licence, registration, school fees, clothing, leisure, holidays, gifts, furniture and maintenance. They must be divided by 12 to determine the monthly portion.
Saving and investing: don't forget! This money can be used for medium-term projects, such as a trip. It is also used to repay credit and to build a small cushion for the unexpected.
Evaluate your budget
Do you spend more than you earn? You may want to consider limiting some less essential expenses, changing service providers or renegotiating your agreements with them.
Do you have any money left at the end of the month? Great: your budget is probably balanced.
