Budgeting for your household

Everyone can benefit from having a budget. In fact, Canadians who have a budget perform better in terms of their financial well-being when it comes to managing cashflow, making bill payments, and paying down debt. Plus, they’re more likely to feel confident and better prepared for their retirement.

Sticking to a budget can be tricky at times. These tips can help:

• Create spending challenges for yourself — set yourself a maximum spend for a week and see if you can hit it
• Plan your meals — you can save money by avoiding take-out or delivery
• Give yourself an allowance — based on your budget you can set a fixed amount to spend per week
• Avoid impulse purchases — ask “do I REALLY need this” whenever you think about buying something
• Make a note for what time of the month or year expenses such as mortgage and property taxes are due, and check you have funds available beforehand.
  

There are many ways to track your spending. You can take advantage of online banking to monitor your spending in real-time, sign up for Scotia InfoAlerts to stay on top of account activity by email or through the app, or you can create your own spreadsheet and track your expenses.

Whatever you choose, having a visual reference of your spending is always helpful.

This is a useful guide to follow if you’re looking for a simple budget breakdown. It suggests that 50% of your budget should go to your needs, 30% to your wants, and 20% to savings.

First, figure out how much you spend in an average month. As a general rule, your emergency fund should have enough to cover 3 to 6 months of living expenses.

Aside from a mortgage, it’s good to pay off any debt you may have before saving. Creating a budget will help you reduce your expenses so you can pay down debt faster and get back on track for saving.