Making a budget in 4 easy steps

Budgets, budgets! Often, we avoid making budgets because we think they are complicated and time-consuming. However, drawing up a monthly budget is a lot easier than you think. Here's the help and free tools you need to get started!

Summary

Drawing up an effective monthly budge in 4 easy steps.

A budget helps you manage your finances better, reduce stress and save money.

Steps to create a budget:

List income: Include all monthly income (salary, benefits, etc.).
List expenses: Include all monthly expenses (rent, food, etc.).
Compare income and expenses: Income should be greater than expenses.
Make adjustments: Reduce expenses or increase income if necessary.

6 reasons for making a budget for 2024

Are you struggling to pay your bills or debts? Are you trying to plan your wedding, your retirement… or the birth of your first child? Are you eyeing a new car? Can’t understand why your bank balance is always zero at month’s end? These are all reasons for sitting down and drawing up a monthly budget. Here are six important reasons:

See where your money is going
Find out what you can afford
Make ends meet more easily
Successfully build an emergency fund and deal with the unexpected
Carry out projects that are close to your heart
Reduce stress and uncertainty (and therefore sleep better!)

Before starting your budget, you need to have the right numbers on hand. For example, how much does your mobile phone cost each month? How much do you need on average to buy groceries? The more precise you are, the more accurately your budget will reflect your financial reality. To draw up your monthly budget, you can use an Excel spreadsheet or, if you’re more traditional, do it on paper. Better still, we have our online budget tool at your disposal to help you. It’s free and it’ll make your task easier, because expenses are already planned and the calculation is done automatically.

Here’s a tip: download your bank and credit card statements for the last few months. You’ll be able to easily track your spending and then allocate it to the right category in your personal budget.

1.

List your income

How much money comes in each month? Salary, social assistance benefits, employment insurance benefits, CNESST compensation, pension, family allowance, GST and QST refunds and the Quebec solidarity credit are all part of your income.

Enter each of the amounts that apply to your situation in your Excel spreadsheet or in our online budgeting tool.

2.

List your expenses

Fixed expenses
Once you’ve looked at your income, it’s time to focus on your expenses. There are all sorts: rent or mortgage, transport, food (groceries and restaurants), clothing, insurance, services (telephone, cable, Internet), leisure activities and pocket money. And don’t forget what you spend on other people… including your pet! These are all recurring expenses that you can plan for every month.

Occasional foreseeable expenses
You should also take into account expenses that are predictable but not monthly: gifts, holidays, school fees, etc.

Unexpected expenses
Finally, there are unforeseen and unforeseeable expenses, such as car repairs or replacing a broken appliance. To cover these expenses, having an emergency fund equivalent to about three months’ salary is recommended.

Repayment of debts, loans and cards
Of course, when you list your payments, you should also take into account any monthly instalments you have to make to repay your debts, loans, cards or lines of credit.

Save your money!
You should also save at least 5% of your income for retirement or other projects.

Once you’ve compiled all this, enter the figures into the online budgeting tool or Excel file, category by category.

3.

Analyze the situation

At this stage, our free online budgeting tool compares your income and expenses.

Is more money coming out of your wallet than going in? On the contrary, do you have a good cushion that would allow you to put some money aside or even carry out an important project for yourself? The tool diagnoses your financial situation.

Online budget

Start

4.

Review your personal budget

Making a budget isn’t everything. Sometimes you have to adjust it. If you realize that your expenses exceed your income, you need to take action. The goal is to balance everything out. The idea is not only to have enough money to pay all your bills each month, but also to be able to save.

Does your list of expenses contain unnecessary items that you could cut? Sometimes, simple, small purchases that repeat themselves can have a big impact on your budget.

Are your debts taking up too much of your monthly expenses? If so, the advice of one of our Licensed Insolvency Trustees could help. Don’t hesitate to make an appointment with us! The consultation is free and 100% confidential.