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How to Set Up a Monthly Budget

How to Set Up a Monthly Budget

Creating a monthly budget is a great way to kick-start debt-free living and add to your savings. A budget is a great financial tool, whether you are looking to reduce your existing debt or simply gain a better understanding of your spending habits. It allows you to determine how much money you have available to spend, prioritize spending on what’s most important, and figure out how much money you have leftover each month.

How Much Money Do You Have?

Before you begin planning your monthly budget, it’s important to know how much money you make. If you have a regularly scheduled paycheque, it will be fairly simple to tally your monthly income. If you’re unsure of what your monthly funds amount to, a useful way to figure it out is to look back at your past earnings and establish an average monthly amount. Once you have an accurate idea of how much money you have on hand, you can begin to create a functional and realistic budget to put into action.

What Are Your Monthly Expenses?

Once you confirm your amount of income, the next step is to track your monthly expenses. Determining what you owe in relation to what you make allows you to plan your budget accordingly. Make a list of all your expenses and total the cost so you have a visual on the amount of money you need to cover all expenses. Record every purchase no matter how big or small. Keep in mind “fixed expenses” like rent or mortgage payments, car payments, loan payments and utilities. Also, make note of things like insurance and taxes so you don’t get caught unprepared.
Compare your expenses to your income and determine if they amount to less than your total income. If so, you can now put the difference aside for larger purchases, future savings and emergencies. Even a small amount helps. Continue to do so each month and watch your debt go down and/or your savings go up.
If your income is not enough to cover your current expenses, adjust your budget. See if there is any wasteful spending you can eliminate to free up additional cash. Do you tend to make impulse purchases, pay unnecessary fees or miss minimum payments? Review and see where you have room to make changes.

Determine a Set Timeline

Once you have a budget in place and are ready to kick-start it, decide on a timeline. Setting a date will give you a goal to work towards, and help you stick to the budget past the first month. Even if you plan to continue with the budget to maintain financial discipline long-term, setting a timeline helps to keep you on track. When you do reach your goal, it’s helpful to review where you are at and update the budget accordingly. If you have paid down debt, you may have now more disposable cash to put towards your savings plans.
Creating a realistic budget and sticking with it takes discipline but it’s well worth the effort. Monitoring and managing your finances will give you a greater sense of control, and make it easier to eliminate the debt that is holding you back.
If you’re feeling weighed down by debt and want help to get your finances on track, fill out our contact form and let us put you in touch with the right people to review your financial situation. Since 2010, the team at has worked with thousands of Canadians to help them get out of debt. Now we offer an even wider service, and it is free of charge. Seeing what we have seen over the years, we figured that Canadians needed immediate access to high quality help, when it comes to dealing with debt. The problem was that the debt industry had so many different types of companies advertising services. Some of the companies were online only, others were out of the country, and to be blunt, some just did not seem qualified to help people make major financial decisions. There are however, some excellent companies right across Canada who have a great track record at helping people and businesses manage their debt. It became our mission at to connect Canadians with companies who we would be comfortable referring our mother to. This takes the guess work and potential pitfalls out of the search. So fill out our form, we will not charge your for our service nor will we mine or sell your information. We will simply connect you to one of the companies who we believe is best suited to help you deal with your debt, so that you can get out of debt for good!

How to Set Up a Monthly Budget

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