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Everyone thinks that budgeting is hard, but really it’s only as complicated as you want to make it. There are a lot of reasons for this; people think they are worse off than they are, and when you download a template from excel, it can be overwhelming. A budget is personal and making one yourself allows you to customize it to your needs. It’s actually much easier to make than most people think.

1. Gather information

Download your last month’s bank statement for all of your bank accounts and credit cards. Break out the transactions into general types, paycheque, rent, utilities, food, clothes, entertainment, etc. Whatever makes the most sense to you. Use your statements to figure out how much money should go into each. Organize these categories into revenue, fixed/variance expenses and savings/investments

Revenue is any money you receive, your paycheck, gifts, tax refunds/credits. Savings and investments are how you pay your future self. It’s important that you pay yourself first, and set aside money for future goals or in case of a rainy day.


Fixed expenses are expenses that are the same every month or that you have to pay and don’t have much to any control over. Mortgage/rent, internet, cell phone bill, any loan payments, insurance

Variable expenses are expenses that change every month, and you have control over how much you spend each month. Food for example can be a variable expense, though you need to buy food, there is a huge difference in the amount spent each month depending on the type of food you buy and from where (eating out versus making food at home). Some other variable expenses are entertainment, car expenses and subscription fees.

Some expenses don’t occur every month but you want to budget for them, such things as Christmas, holidays and car maintenance. For areas that you don’t spend on each month take the amount that you normally spend each year and divide it by 12 so you set aside money each month for that expense. For example, car maintenance is not done every month but there are expenses that come up throughout the year that I can budget for. In my budget, I know that I will need to get an oil change done about once every year, and I will need to pay to have my tires changed twice a year

image of budget spreadsheet for car maintenance, oil change, tire change and the cost annually and monthly

This means that I should put aside $30 a month just for normal maintenance on my car, this doesn’t include any other repairs that could be required for the car, so I would top it up to $40, just to give a bit of a buffer.

Just don’t get bogged down in the details, setting aside money for savings is a good way to save for upcoming expenditures, just setting up a general fund can work just as well. It all depends on your preference. 

2. Ensure that your budget balances and makes sense.

Most people try to follow the 50/30/20 rule for their budget. 50% of your income is spent on necessities, 30% on wants and 20% on saving/investing. If you aren’t hitting them you will want to either increase your income or decrease your spending in these areas. Your budget may not be perfect but working towards this guideline is a good goal. 

Depending on your stage of life, this guideline may not be the best option for you, if you are being supported by your parents still then you most likely won’t need to spend 50% of your income on necessities and can instead put more money towards savings and wants. Unless you are including the money from your parents in your income. It often is outdated depending on where you live and what is important in your life. But it is a good goal to work towards, the most important thing about your budget is that you are 

Pay yourself, and make sure that you put money into savings, for future goals and retirement. Generally, you want to have a nest egg of about six months worth of expenses and you’ll want to put money away for retirement. Learn more about TFSAs and RRSPs.

3. Review and keep your budget updated

Your budget isn’t helpful if you don’t use it. Set aside time each week to go over your budget. Review how your actual expenses line up with how you thought they would in your budget. 

See where you need to adjust your spending and how you need to adjust your budget. Maybe you decided to eat out too much and blew your entire food allocation for the month in a week. Make an effort to eat-in for the rest of the month to cut down on food expenses. Perhaps you budgeted $10 a month for car maintenance but forgot about needing to change your tires twice a year and need to increase the amount that you set aside each month. 

Maybe you find it really hard to follow your budget because you can’t see how much you have left to spend in each category. It could be helpful for you to review your budget more often. You could try using cash envelopes. This is taking your money for the week/month/pay period out and putting the cash for each category into envelopes. You only use the cash in the envelope for each category. There are also apps that will do something similar for you if you don’t want to carry around cash. 

Budgeting is one of the most important things to do for the health of your financial life. It can be as simple or as complicated as you want. The most important thing is that it works for you.

This post may contain affiliate links.

This means that I earn a small commission when you buy or sign up for something through the affiliate link. It will not affect the cost to you and I only recommend what I actually use and like.

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