We have focused the last few posts on investing, educating your children, the truth about financial planning, the CRA, and more. But we’ve never given it to you straight & gave you tips on how to best build/manage a budget to be successful in your short-term and long-term goals.

Many of us — especially millennials — are living paycheck to paycheck with next to nothing in our savings accounts. With the wages being the same as they were decades ago, but the cost of living having doubled, it is increasingly important to know to budget and live within your means.

Start with your income…

Put a budget plan in writing. Go old-school with a notebook and pen, or invest in online software, download one of many budgeting apps, or use a budget template.

When making your budget, it’s important to be as comprehensive as possible. First, list all of your income, including money from sources like:

  • Wages
  • Alimony
  • Child support
  • Freelance income
  • Reward program payments

It is best to use your net (take-home) income as the starting figure, or if you prefer to start with your gross income be sure to make each deduction a line item. If you have numerous deductions from your paycheck, such as insurance premiums, retirement contributions and payments to savings accounts, be sure to include all of those items in your budget.

Now, your expenses…

After you account for all of your income, list your expenses. You can divide them into two categories:

  1. Fixed Expenses: stay the same each month; usually, you don’t have a ton of control over them — at least in the short term.
  2. Variable Expenses: fluctuate, and often you can make immediate changes.

Make sure you really get into it, don’t leave anything out. Expenses to include could be:

  • Housing payment
  • Insurance premiums
  • Car payment
  • Utilities
  • Child care costs
  • Monthly fees and subscriptions
  • Car and home maintenance
  • Debt payments
  • Groceries
  • Savings
  • Medical costs
  • Gifts
  • Vacations
  • Entertainment

Pay attention to when your expenses are due…

When making your budget, take note concerning the frequency that an expense falls due (monthly, weekly, quarterly, annually) and set money aside so that you’re paying toward the less regular ones during each pay period. It helps to mark in your calendar(s) with reminders when each payment is due.

Monitor where your money really goes…

You need to track your spending to see how it compares to your budgeted amounts. From this point you can decide whether or not your budget is maintainable.

You have a couple options to keep track. A pen and paper work fine, however, those with loads of transactions to account for may find that writing it all down isn’t efficient. Another option is to use a spreadsheet to keep track. Once you enter your transactions, use the spreadsheet to see totals for your various budget categories.

There’s an app for that… for either your iPhone or Android. These apps link to your bank account or credit cards to keep tabs on your money — you can even use the apps to categorize your spending.

Maintaining your budget, and continuously updating it, requires discipline. This will not be a one-time thing, you must be mentally prepared for that.

Pay yourself first…

Wait what?! It’s true, paying yourself first ensures that you are working toward your financial goals. Once your paycheck hits your bank account, it’s easy to view the entire amount as available for spending. Instead, set aside your savings right from the beginning.

Set up your direct deposit to fund your savings goals, sometimes your work is able to help with this. Just have a separate direct deposit slip for your savings account with a specific amount added to your direct deposit schedule.

Be realistic!

It’s tempting to make the budget as bare bones as possible — because reaching your goals requires eliminating categories such as entertainment or gift giving, right? Wrong. Such lofty goals are not sustainable, especially in the long-term. It simply isn’t realistic to say you will never eat out or never go out. You can still maintain a social life and a budget.



That’s that. There are your basics for getting started. Once you become more experienced, or if you ever need a second professional opinion, contact your accountant. They will be able to assist you in any financial planning stages, and help prepare you budget for a big purchase or major life change.


KBH Chartered Accountants really wants to see you succeed. Contact us today for an assessment, or for any financial questions.