Why do I need a budget?

A budget is an essential money management tool. If you want to make sure that you’re spending within your means and make plans for the future, you need a budget. 

At its core, a budget is a system for estimating how much money you need to cover various itemized expenses during a particular period and matches your actual expenditures against the estimated amounts. A budget helps you see where your money goes every month which then lets you see how you can optimize your spending. Are you maybe spending more than you need to go on a given area? How much money do you have left over at the end of each month? These are questions that a budget can help you answer!

How do I create a budget?

A budget is personal and so is the budget creation process. There’s no single format that suits all circumstances, but every good budget has certain basic features that make it work. Your budget needs to be realistic, comprehensive, concise, and flexible. Similarly, there isn’t just one way to go about developing a budget, but there are a few general steps to follow:

1. Identify your immediate, intermediate, and long term financial goals. List these goals in order of importance, noting a target date and an estimated cost.
   
   
   
2. Examine your current financial position:
   • What is your monthly and annual household income?
   • How much do you spend?
   • What is typically leftover for incidentals and for savings?
   • What are your debts?
     
     
     
3. Write out a monthly budget for the next 12 months. Break down your spending into various categories and estimate how much you spend in each:
   • income
   • food
   • household goods
   • transportation
   • entertainment
   • and more
     
     
     
4. Relate your budget to your overall financial plan:
   • How much money do you expect to have left over after expenses?
   • How will you allocate this money to meet your different financial goals?
   • How long will it take you to reach all of these goals?

Get started with our budget planner

Download our free monthly budget planner and take control of your financial future. Track your income, manage spending, monitor your available cash, and build healthy money habits that help you achieve your savings and financial goals.

Download budget planner

How do I use my budget?

Use our budget planner to get a clearer picture of your finances throughout the year and build better budgeting habits.

Start by selecting the tab for the current month, then enter your weekly income, regular expenses, discretionary spending, and savings. The spreadsheet will automatically calculate your monthly totals and available cash, making it easy to track your budget. You can return to the yearly budget tab at any time to review your progress, compare monthly spending, and identify opportunities to adjust your spending and savings to stay on track with your financial goals.

What’s next?

Developing and using a budget is an exercise in defining your goals and your means of achieving those goals. This is a summary of some of the key things you need to know about creating and managing your personal budget. If you would like to discuss your budget or financial goals, one of our advisors would be happy to help.