Is budgeting really necessary?
Are you one of those people for whom making (and following!) a budget is part of everyday life or are you one of those people for whom the mere mention of the word causes anxiety?
If you are in the first category, we congratulate you! For the others, here are a few tips and tools to help you get started.
First, let’s answer the question you may be asking yourself: do you really need to make a monthly budget? Is it useful even for those who don’t have money problems? The answer is YES.
In fact, the budget is used to:
- Planning, the key to less stress. By planning your expenses and receipts as accurately as possible, you will avoid unpleasant surprises.
- Pay your credit card balance at the end of each month. Credit is a great financing tool, as long as it is used properly. Paying your card balance in full each month will prevent you from accumulating debt and paying interest on your expenses.
- Consider longer-term projects. Making a budget is not just about budgeting for groceries or managing other everyday expenses. It is essential to help you achieve your goals, whether it’s paying off debt, taking a trip, buying a new car, etc.
- Plan for your retirement: The sooner you start saving, the more money will work for you. Don’t underestimate the importance of savings, no matter how small!
- Build an emergency fund (equivalent to 3 months salary): This is what will allow you to face major life contingencies (pandemic, job loss, separation, illness). It is normal that it takes time to build this fund, slowly but surely!
Where to start?
- We have developed a budget grid to help you in this task. Download it here!
- Start by taking stock of your assets (what you have) and your liabilities (what you owe).
- List the money coming in and going out. Are you balancing your budget or do you need to adjust your spending?
- A good tip to make sure you don’t forget anything: go through the last few months of credit card and bank statements to make sure that all the family’s cash inflows and expenses have been accounted for.
If you are on a very tight budget and are worried about running out of food, call the 211 line and find out about food banks and community kitchens in your area.