Seven steps to a budget made easy.

Are economic troubles causing you to consider your financial situation? You may be worried about losing your job or how much debt you have. Avoid a potential personal financial crisis; get back to basics with a budget you can stick to. Here’s how to start:

Step 1: Set Realistic Goals

Goals for your money will help you make smart spending choices. Ask yourself: What do I want my finances to look like in one year? Decide what’s important to you and start there. More about this

Step 2: Identify your Income and Expenses

You probably know how much you earn each month – but do you also know where it all goes? Find out by tracking what you’re spending. Spend as you normally would, but for a few weeks, jot down every cent you spend. It’s easy, and you might be amazed by what you find out. More info on this  

Step 3: Separate Needs and Wants

Ask yourself: Do I want this or do I need it? Will spending this money get me closer to my financial goals or further away? Can I live without it? Set clear priorities for yourself, and the decisions become easier to make. Learn more

Step 4: Design Your Budget

Make sure that you are not spending more than you make. Balance your budget to accommodate everything you need to pay for. One easy way to do this is with our free, easy-to-use budget calculator spreadsheet and worksheet that’s built for Canadians. Learn more about crafting a budget

Step 5: Put Your Plan into Action

Match your spending to when you receive your income. Decide ahead of time what you’ll use each pay cheque for. Ask yourself: Have I allocated money for my necessities (housing, food, utilities, transportation, etc.)? Have I put money aside for my debt payments, unexpected expenses, savings and the fun stuff? These decisions will protect you from going into debt further because you won’t rely on credit to pay for your living expenses. Learn more

Step 6: Seasonal Expenses

You know that things will “just come up” – school expenses, new shoes or annual membership. Set money aside to pay for these expenses so you can afford them without going into debt. More on this

Step 7: Look Ahead

Getting on track with a budget can take a month or two. You’ve lived all this time without a spending plan, so give yourself time to adjust. Don’t be afraid to ask for help if things aren’t falling into place – help is just a phone call away.

Source: www.mymoneycoach.ca