Personal Finance – Keeping to a Budget

Business Education, Personal Finance, Retirement
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Having a budget is a great tool because it allows someone to critically analyze their spending habits and realistically forecast their future financial goals. For such a simple concept, creating and sticking to a budget can be one of the hardest things to do! However, with a little bit of self-control and perseverance, it can be an accomplishable goal for anyone to do.

Getting started

Budgeting does not have to be an intimidating task. To start, just try opening an Excel spreadsheet and input your revenues and expenses for one month at a time. Every time you make a purchase, input this into your spreadsheet and deduct the amount from the balance remaining. Being more aware of your spending is the first step to generating an effective budget. To prevent overspending, try paying with everything for the first month through one singular account, either chequing or credit card. This will give you a clear idea of what is coming in and out, without worrying about how much has also been spent via cash and other accounts.


Once you have taken the time to document your income and expenses for one month, you will have moved onto the analyzing position. Look over every transaction and add up how much you’ve spent on housing, food, utilities, etc. Some costs are non-negotiable, such as rent or mortgage payments. However, some costs are more variable, such as the amount of money spent on eating at restaurants or entertainment. This is the time to narrow these costs down so that they are at a comfortable amount for yourself. Be honest with yourself about what you will be able to give up.

Making the Budget

A popular form of budgeting is known as the 50-30-20 budget. Using this method, 50% of your monthly salary will be put towards essential costs such as groceries and living expenses. Then 30% of your salary will be allocated to things that would be nice to have, such as vacations or entertainment. The final 20% will go straight to a savings account. It is up to you what you would like to save up for. Typically, people will put money towards retirement savings, or their children’s college savings.   


There are a wide variety of free budget tools available to try out. Most financial institutions will offer a budget app that helps monitor your spending. If you have overpassed spending in one area, it will send you a notification to let you know.

Mint is a free tool that is popular because it enables you to link all your accounts to it. It can keep track of your savings, chequing, and credit card accounts all at once. Mint has visual graphs that show you how far away you are from paying off loans or savings for a certain goal.

Excel, as mentioned above, is a good starter tool. If you enjoy keeping minute track of your spending habits, Excel is a simple way to do so. Excel also has various templates that might help make transactions clearer to see.


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