Creating and following a budget – why, how and when

Managing household expenses. Coping with high levels of debt. Living paycheck to paycheck. Struggling to save due to unexpected expenses. Do these sound familiar? If you are experiencing, or have experienced, financial stress, it can sometimes seem like there’s nothing you can do to solve it, and as a result you may become even more stressed.

The good news is, budgeting can help alleviate the stress resulting from such money-related issues. And contrary to a popular misconception, budgeting is not about restriction. It’s  about seeing clearly where your money is going, so you can more easily achieve financial objectives – save for a trip, pay off debt, build an emergency fund for unplanned expenses, etc. – and stop stressing all the time about money.

Did you know?

• 74% of Canadians are concerned about their savings.
• 60% of adults rate their financial knowledge as "fair" or “poor".
• 2.8% increase in consumer bankruptcies for the 12‑month period ending June 30, 2025, vs. the same period ending June 30, 2024.

Also, people dealing with financial issues are:

• Twice as likely to report poor overall health
• Four times as likely to suffer from sleep problems, headaches and other illnesses
• More prone to developing serious health problems, such as heart disease, high blood pressure or mental health conditions, such as depression and anxiety

Budgeting: OK, but where do I start?

A good starting point is to do a quick self-check to assess your current financial situation and find out what’s putting pressure on your wallet:

• How much do I earn each month?
• What are my biggest expenses?
• Do I usually have money left over at the end of the month?

Listing your expenses by category (housing, transportation, food, leisure, etc.) will provide you with greater clarity on where your money is going.

If you are new to this, start with tracking one category. Try to keep your receipts as you spend so you will have accurate information to analyze when you look at your spending habits. Over time, a pattern of spending should start to emerge. You may see areas where you can make small changes and free up some cash flow. You can then move that money somewhere else, like to pay down debt or add to savings. You will be amazed at how this small consistent action can improve your financial wellness and give you more choices.

A few budgeting tools

Creating a budget is all about the math. When dollars in are more than dollars out, you have some money left over, and that’s a good place to be. You can use this One budgeting tool that you can use is this simple budget template, a user-friendly fillable PDF tool.

Many applications are also available, such as:

• Mint
• YNAB
• Any type of spreadsheet

When creating your budget, be realistic and kind to yourself, track your progress
and celebrate small wins.

When and how often to review your budget

Reviewing your budget regularly is key to staying on track with your financial goals. A good rule of thumb is to check in on your budget monthly. This allows you to adjust for any unexpected expenses, track your progress, and make sure your spending aligns with your priorities. However, there are also key moments when a review is especially important.

In a nutshell

Budgeting is proven method to track your spending so you know where your money goes. It can help you manage your expenses, create ways to save for the future, and instill healthy financial habits. Remember: the key to efficient budgeting is being consistent and reviewing it regularly, be it monthly, quarterly or annually.