In order to make a useful budget you need an effective tool that is easy to use.

The Budget Planner is a tool that allows you to create a personalized budget and save it online. It gives you tips and guidelines and helps you figure out your next steps with suggestions. It also creates charts that show you where your money goes. You also have the option to compare your budget with those of other Canadians like you.

Use the Budget Planner to make a budget.

Steps to make a budget

Take the following simple steps to make your budget.

Step 1: List your income, savings and expenses

• take your recent pay stubs, bills, and account statements
• enter the amount of income, savings and expenses into each category of the Budget Planner
• if you can’t find a field for a specific item, you can always add and name your own items

When you’re done, review the amounts to make sure you didn’t forget anything. These items should represent your current situation.

As you’re entering data, the tool will give you tips to help you save more and/or spend less. Consider those tips in order to balance your budget.

When you’re done creating your budget, save it online so you can return to it anywhere, at any time.

Step 2: Review your results

The results section provides you with average guidelines. These guidelines tell you what Canadians usually spend or save for each budget category, for example, food, housing, clothing, insurance, etc.

Look at the different alerts you receive for each category:

• Thumbs up: this amount is within the average range
• Warning sign: this amount is slightly above the average range
• Stop sign: this amount is above the average range

These alerts will help you determine where you should focus your attention or try to reduce costs. Everyone’s situation is different and while the guidelines can’t apply to everybody, they provide a good starting point.

Review your results graphics, they give you a clear visual of your overall budget. You’ll see a graphic that shows you how your budget compares to those of other Canadians in similar situations. It’s valuable to compare your financial habits with people with the same age, income, housing and family situation.

Step 3: Review your next steps

In the next steps section, the tool gives you personalized suggestions. These suggestions are based on your situation and what you have entered in your budget. They help you figure out your next steps whether you have money left or are overspending.

Read them carefully and follow the links to useful educational tools and content in order to improve your budget.

Tips to help you stick to your budget

Now that you have a budget, try to stick to it and improve it as you go.

To help you with this task, try the following:

• keep all your receipts and bills
• limit your spending as much as possible to what is in your budget
• update your budget with any changes, for example, a pay raise, a bill increase, etc.
• compare your budget to what you actually spend at the end of each month

Evaluate your budget from time to time. If your actual spending often varies from your budget, readjust your figures to make it more realistic.

When comparing your budget to your actual spending, ask yourself the following questions:

• are there large differences between your actual spending and your budget
• which categories have the largest differences
• are differences due to an unusual situation or is this likely to happen each month
• can you save enough money to reach your financial goals or pay off your debts

Continue with this exercise each month. You can set a reminder or book time in your calendar to make sure you review your budget regularly. If you make it a habit, you are more likely to stay on track.

Source: https://www.canada.ca/