SAVING & BUDGETING
Ah yes, budgeting. The foundation of any good financial plan. Whether you’re looking to create a budget, get advice on your current one, or have no idea where to start we can help you out. Often a big goal in budgeting is saving money – whether it’s being more aware of what you’re spending, or saving up to buy something big.
Why do I need to make a budget?
Creating a budget allows you to really understand all of your money coming in and going out. Having a firm grasp on how much money you make vs how much you spend can go a long way to reaching your financial goals – whether they are saving for something short term or long term. Creating a plan for your money will help you monitor your expenses and implement your goals into your budget. Sitting down and having an honest look at your expenses can also identify places you didn’t realize you were over-spending – like restaurants or clothing.
What should I include in my budget?
Everything! All money should be accounted for in your budget, don’t leave anything out on purpose – below is a list of common budget items with some examples of what falls in each category in brackets.
- Rent or Mortgage
- Transportation (car maintenance, insurance, transit pass etc)
- Food (groceries, eating out, vitamins/supplements)
- Utilities (internet, cable, electricity, water)
- Any subscription services (Netflix, Amazon, food box)
- Clothing (work clothing, sports jerseys, regular clothing)
- Entertainment / Recreation (gym membership, movies)
- Loan or Debt Repayment (student loans, line of credit)
- Medical expenses
How much should I be saving per month?
How much you save each month is entirely up to you. Consider all the things that you are currently saving for – whether it be a new car, down payment, trip, education, or all of the above – it’s good to know your end goals so you can properly allocate your money to reach them. Your savings goals should be external from your rainy day fund; which is to be used in case of emergencies. There are certain tips that we can teach you to help make saving easier and reach your goals faster such as using an RRSP or TFSA for a house down payment (within the legal limitations).
How can I optimize my budget to save money?
Think of your budget as a working document. The plan is meant to be a guide, it is flexible. If you want to save more, you can either spend less or make more. Sometimes simple lifestyle changes can allow for big savings in your budget, like making your own coffee, getting a roommate, working-out at home instead of a gym, and taking transit. You can also use a budgeting or money monitoring app to help you track your daily spending and make sure you know immediately if you have room in your budget for that ice cream or awesome shoes.
When should I start saving for retirement?
When you first enter the workforce, retirement might seem like a lifetime away. You’ve got student loans to pay off, a house to save for, and traveling to do. Balancing your retirement goals with spending and enjoying your life as you go can be difficult and everyone’s priorities are different – we can help you lay out your goals and create reasonable steps to reach them within your timeline.