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You might be thinking it’s time to gain control of your finances. Or maybe you want to eliminate debt to improve your credit. How can you achieve this? Creating a budget is the perfect tool to gain this control! 

What is a budget?  

A budget is a plan based on estimated income and expenses over a set period of time. The period of time is your choice. It could be monthly or yearly based on your budgeting goals. 

You may have a monthly budget to plan and track the costs of groceries, rent or mortgage payments, healthcare and utility bills. You may also choose to create a monthly budget to save for a vacation or other major expense. 

How much income do I have? 

Once you have decided what your budgeting goals are, and whether you are creating a monthly or yearly budget, here are basic outlines to help you begin controlling your finances. 

First, outline your income. Go through how much income is coming into your household. This will include jobs, side hustles, government support or any other financial support you might be receiving. Be sure to include your partner if they are going to be a part of your budget as well.  

TIP: Print out account statements or sign up for e-Statements and view them online to help target the income that you have coming in. 

What are my expenses? 

Next, write down all your expenses, from shopping trips to bills. Your rent or mortgage is going to stay the same each month, but you will also have utility bills that fluctuate monthly or bills you pay once or twice a year. Your other expenses will be food, gas, entertainment, unplanned expenses and personal care.  

Again, viewing your monthly statements will help to figure out how much you have in expenses. 

Having a full understanding of your financial costs can help you see how much money you may have left over for other items or savings. If you notice you have less income than what your expenses are, you are spending more money than you can afford. At this point, look at your budget to see what you do not need or what you could spend less on.  

What are your priorities? 

Once you have reviewed your income and expenses, list your items in order by priority. What is most and least important? This is going to help pay expenses in a way that will maintain your quality of life over quantity of things you want to buy or do. 

Now that you have the outline of your budget, keep it going! Plan for how you will spend your money monthly/yearly. You may have to adjust as time goes on and that’s okay. The main goal is to stay on track with your finances.