By Christi Posner
If you’re ready to start living on a budget, this is your all inclusive guide! Whether you want to create a budget so you can pay off credit card debt, save for a goal, or just feel like you have control over your money, we’re going to show you the way.
Many of us have tried to create a budget only to have it fall apart. We’re going to walk you through how to create a budget, how to organize your bank accounts, and how to live on a budget in a way that’s fool-proof.
Follow this 6 step guide to learn how to live on a budget:
1. Create a budget
The first step to living on a budget is to create a budget. We have created a free, interactive budget calculator spreadsheet to guide you through this process. You simply start by putting in your income, and then plugging in your expenses. It’s easiest to start with bills, and then begin filling in the rest.
If you’re not sure how much to put in for some categories like groceries or gas, consider tracking your expenses. We’ve got a monthly expense calculator and tracker to help you with this part too!
2. Separate Your Budget into Fixed, Savings, and Variable Expenses
Once you've created a balanced budget, the next step is to divide your budget into three categories. Learning how to separate your budget into fixed, savings and variable expenses will help you organize your bank accounts in a way that makes budgeting easy.
3. Organize Your Bank Accounts
Now that you’ve split your budget into three categories, you can organize your bank accounts. The idea is to separate the money meant for your bills, from the money meant for savings, from the money meant for spending. This way you always have enough money to pay your bills, you know your spending money is a reasonable amount, and you can save for emergencies and those budget breakers that come up only every so often.
4. Begin Living On Your Budget with a Paycheque Plan
A paycheque plan is where you begin taking your budget off of the paper and putting it into action. Create a timeline to make sure all of your bills get paid on time, you are able to spend your cash, and save for irregular expenses and emergencies.
5. Continue Tracking Your Expenses
At the beginning of the budgeting process, and periodically throughout, it’s a really good idea to track where your money is going. This lets you know if your plan is working or not. Tracking expenses doesn’t have to be overwhelming. It’s simply a tool you should use every now and again to make sure your budget will continue to work for you and your family.
6. Review Your Progress
When you begin to live on a budget, you will notice a change in how you feel. You will feel lighter, sleep better, and have less stress about money. Take time to recognize the difference in how you feel managing your money now compared to the way you felt when you started.
Set up meetings with yourself to check in on how your money plan has been going. Think about what has been working well, and what’s not working well right now. How can you make adjustments to make your life easier?
Reflect on some unexpected expenses that arose over the past couple of months. How did you deal with those? Is there anything you should change to deal with them in a better way in the future?
Taking time to review your progress is a valuable experience. Start with 3 minutes every week at first, and then eventually you will be able to spread out your check-ins to every quarter.
A Non-Profit Credit Counselling Agency Can Help You Live on a Budget
If you would like to talk to an expert about any of these steps, just ask! At no cost, you can sit down and speak with an accredited Credit Counsellor to create a budget, or get help putting it into action.
Learning how to live on a budget isn’t information we are born knowing. It’s something we all must learn at some point in our lives, and we hope this has helped to guide you through the process. Happy budgeting!