We all know that paying off debt can be a slog, particularly when the debt involved is a large sum or has a large interest rate. These are the kind of debts that a person making the minimum payments will have a hard time ever conquering. Making this minimum payment will keep the creditors off your back, but it’s not going to get you moving ahead either. This is why we want to budget, so we can tackle our debts and keep moving forward.

Why Should I budget? Consumer Proposals and Bankruptcy in Canada
It’s important to know exactly where our money is going

While we’ve covered how to create a budget in the past, here are the important points:

  1. Note your net income (your budget won’t work unless you know how much you bring home).
  2. Track your spending (we always spend money slightly different than we think we do, and this illustrates that for us).
  3. Set your goals (a budget works best when you have clear goals that you want to accomplish).
  4. Plan it out (it’s easier to map out where your money is going each month rather than just dealing with the expenses as they come).
  5. Adjust if necessary (sometimes the budget seems perfect, until we start to live with it. Make adjustments where needed at this stage).
  6. Keep checking in (the budget will only continue to work if you continue to monitor it).

There are a few other things to keep in mind. You will want to make sure you set aside money for emergency savings each month. Emergency savings are crucial for dealing with anything you may not expect to come your way. It’s equally important that you don’t overspend once you establish a budget. It can be tough to stick to your guns, but this will ensure your budget works the way you designed it. As you stick to your budget, you can look to pay down your debts even faster. This can help save you time and money in the long run, and that is really the point of a budget. Keep as much money in your pockets as you can!

Why Should I budget? Consumer Proposals and Bankruptcy in Canada
Let your budget guide you where you need to go!

A budget that works is like a road map through each month. You can see your journey before you begin, and you can see a clear plan on how to get where you want to go. If you’ve created budgets, and still can’t seem to get ahead, think about coming in for a free consultation. We will take 45 minutes and help you come up with a plan for your fresh start!