It is important to review your budget whenever there’s a significant change in revenues and/or expenses. Remember to update it at least once a year to take stock of your financial situation and review your projects.
Wondering how to make your budget and what information you need beforehand? Here’s a list of things to keep in mind:
- Choose your tool
To do this exercise well, you can use an online calculator or simply a sheet of paper and pencil. In order to make things easier, Laurentian Bank provides you with a new budget grid that enables you to better understand and control your expenses.
- Enter your income and expenses
Include your net monthly after-tax income, as well as any other source of income, such as tips, what you earn from self-employment, rental income, investment income, support payments, or others. Also, keep track of all your monthly expenses, which you can sort into these broad categories:
- Housing
- Transportation
- Debt repayment
- Insurance
- Day-to-day expenses
- Other expenses
- Think about your savings
Whether it’s for a short- or medium-term project, preparing for retirement or setting up an emergency fund for any unforeseen event, savings should always be part of your monthly budget. Define your goals and their horizon, and allocate a certain amount of your income to savings in order to reach them.
Once you’ve done this, you can determine the most important part of your daily expenses, know where your income is going, reduce non-essential expenses and avoid spending more than you earn. Take as much time as you need to make your budget; it will be good for you in the long run to save more. Need advice on how to better manage your budget and reach your financial goals? Talk to your Laurentian Bank advisor today.