Determine Your Monthly Budget

It's easy to get overwhelmed when thinking about your finances, especially if you are saddled with debt. The best way to determine your monthly budget is to start by recording your total monthly income for the family and your total monthly expenses.

To make these easier to review, it is ideal to break out your expenses into two categories: fixed and flexible.

Fixed Expenses:

Fixed expenses are bills that stay relatively the same each month and will typically even come out on the same date. Some examples of fixed expenses, which are generally non-negotiable, include mortgage or rent payments, car/household insurance, car loans, other loan payments, credit card payments, cell phone bill, household utilities, child support (if applicable) and any medical bills such as medication, orthodontic payments, etc.

Flexible Expenses:

Once you calculate your fixed expenses, you will want to take a look at your flexible expenses or payments. Flexible expenses may change from month to-month and are typically the things households look at when trying to reduce spending or free up monthly funds. These types of expenses include groceries, cable/streaming services, internet, gas, entertainment and dining out, etc.

The goal of determining your monthly budget is to see how much of your monthly income goes to bills, and what is leftover for spending and entertainment. It is important to check up on your expenses and spending habits on a regular basis to ensure that you are continuing to live within your means, and are not stretching your budget to the point of extra debt. It can be easy to run up a credit card thinking “I’ll pay it off later”, but unless it is an emergency situation (vet bill, car repairs, etc.) it is best to avoid that mentality and only spend what you have on-hand.

If you do happen to find yourself struggling to make your bills each month, it might be time to look around for some places to save some extra money. Some great options for saving money include:

• Reducing or eliminating your cable package
• Lowering your energy usage (turn down that thermostat and bundle up in colder months!)
• Reducing water usage (taking shorter showers, doing less loads of laundry)
• Going out to eat less frequently or entirely. It is amazing how much you can save by skipping the drive thru and making your own coffee at home!
• Learn to say NO (to gift exchanges at work, nights out with friends, special events whenever possible, etc.)
• Attempt to negotiate lower bills with any company you deal with
• Reduce grocery spending (or get cash back when you do shop)
• Use coupons! Shop on sale, collect customer loyalty points to buy bigger ticket items
• Buy used when you can! There are great resources for buying used such as Facebook Marketplace, Craigslist or Kijiji. This is also a great place to make some money! Purge your house and sell anything you don't love or need anymore.