A budget is a personal spending plan that can help you control your spending and direct more money into savings to allow you to reach your goals. Only you can take the necessary steps to ensure you meet your financial goals.

Below are a few cash flow management tips to help you implement these ideas. Choose one or two to implement immediately. Once you’re in the swing of things, you can start doing more. You'll be able to achieve your savings goals and reduce the worry and stress surrounding cash management.

Use the Current and Future Expenses worksheet to record where your money’s being spent today and where you will spend it in the future.    

When it comes to budgets, the key to your success is in the doing.

Challenge Yourself to Find the Money

  • Reduce the cost of financing your debt. Pay off high interest debt first, usually credit cards. Use cash to reduce balances. Consolidate debt in lower-cost vehicles.
  • Scoop up the surplus (from month’s end) to eliminate debt, especially consumer loans or credit card debts. Saving money, which pays no interest, while not paying off a debt costing 19% or more is poor financial planning.
  • When a regular expense such as a loan payment or a mortgage is eliminated from your budget, continue putting that amount into savings. Set a new goal for the money.
  • Manage your cash inflows and outflows with pre-programmed Internet banking.
  • Make savings a priority.
  • Set a fixed amount for variable expenses. You should have a rough idea of the cost of your variable expenses such as groceries, gas, and so on. Set an amount you don’t wish to exceed each month and transfer that amount to another account. Use a debit card linked to this account to pay for those expenses. When the account balance is depleted you will have to wait until your next payday to spend more. It won't take very long to work out a regular spending pattern so you don't run out of money.
  • Avoid impulse spending.
  • Arrange to save through payroll deduction plans. Your money will always go into the savings or investment account in the amount that you choose. In addition, payroll savings for RRSPs will save you taxes each payday, rather than once a year at tax time.
  • Limit your use of credit cards. Try to go a few days without carrying any credit or debit cards. If this is too extreme, just leave one at home, then two and work your way up until you are no longer dependent on them.
  • Practice being thrifty; small savings produce significant results. You don't have to deprive yourself, but if you’re a coffee-drinking, fast-food-eating, lottery-playing chain smoker, you can save a bundle just by cutting down a little on each of those things.
  • Don’t spend your change. Every time you break a paper bill put the change in your pocket. Don't spend it. Every night when you get home, deposit that money in a jar. After several months, count it all up, take it to the bank and deposit it in your child's RESP or use it to make an extra loan or credit card payment. You’ll be surprised how quickly it can add up to hundreds of dollars. You’ll also be more reluctant to spend money on little things when you have to break a bill to do it.
  • Stay away from bank cash machines or at least limit their use to once a week. Get enough cash out for the week and don't go back. If you spend all of your money by Wednesday, then go without for a few days. You'll find that your money will last longer and longer each week and you’ll save on fees.
  • Plan ahead for expenses, even surprise ones. Christmas, birthdays and vacations happen every year, so plan ahead. For unplanned expenses such as car repairs, keep unused room on your credit card or put a little extra away into an emergency fund each month, which adds up over time.
  • Pre-plan where funds from raises, overtime and bonuses will go. Divide those funds and allocate them between debt repayment, future savings and life events.
  • Put windfall income such as tax refunds or gifts into savings to meet your goals. In other words, be proactive with savings if you get “bonus” paycheques. If you’re paid every two weeks, twice a year you’ll receive three paycheques in one month. Plan all of your monthly expenses including mortgages, car loans and groceries so that they’re covered by your income from two paycheques each month. Consider this third monthly pay received twice a year as a bonus. For any of these windfall items, use them exclusively to advance your financial goals in the following order:
  1. Pay off high interest debt (anything over 12%).
  2. Deposit in your RRSP, TFSA or child’s RESP.
  3. Make extra payments against mortgages or low interest loans.
  4. Deposit in other savings, whether for investing, saving for a vacation or a new set of golf clubs (it’s your choice).
  • Start or increase utilization of company matching programs; set out a timeline to increase your participation rate; aim for 100%.
  • Stop the leaks (such as extra bank charges, late payments).
  • Always ask if a lower rate/premium is available.
  • Develop milestones, then increase them over time:
    • To save $1,000.
    • To not spend $5/day.
    • To direct an extra $30/week onto credit cards.

Home Budget Calculator

Managing a budget can be a frustrating and daunting task. One of the most important aspects of controlling a budget is to determine where money is going. This calculator helps you do just that. By entering your income and monthly expenditures, you can see how much you may have left to save and where your money is being spent.

Information and interactive calculators are made available to you only as self-help tools for your independent use and are not intended to provide investment or tax advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.