How to budget

How to Stick to Your Budget

There are many ways to track your expenses but I would like to focus on the top three. I am sure we all remember seeing our mothers sitting at the table beside a stack of receipts, balancing her cheque book. If you decide that the Cheque Book Method is best for you, you will need to determine which items in your budget will be paid by cheque or automatic withdrawal and record these in your cheque book by date. If you use a debit card you will also need to remember to record the debit payments in your cheque book. At the end of the month, compare your cheque book records to your budget. You will need to be diligent to keep your cheque book up to date. 


Another commonly used method is the Accounting Method. This method uses a page in a notebook for each expense category you wish to keep track of. Write down the amount you plan to spend as the opening balance. As you make purchases, subtract that amount from the opening balance. The remaining balance indicates the budgeted amount you have left in the category. This method entails paperwork and record keeping. You must remember to always record all items you purchase.

My personal favorite tracking method and definitely the best way to give yourself a kick start to budgeting is the Envelope Method. Begin by keeping money for separate expense categories in separate envelops. You can tell if you are on target just by looking at how much cash is remaining in the envelope at any given time. As you spend, you can record the amount and description on the envelope and/or save receipts. When an envelope has no more then you cannot make anymore purchases for that category. You cannot spend any more money than you allotted for in the category. You will need to ensure that you are careful with cash and keep it in a safe place.

Of course, these methods only work if you make them work. Choose a method, or a combination of methods, which you will be willing to put into practice. And do not become discouraged if it does not work out the first month, make any necessary adjustments and try again!

If you are still overwhelmed by your bills, a Licensed Insolvency Trustee can help review all your options with you to have a better financial future. Please contact our office for a free initial consultation.

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