How to Save Money » Budgeting

Why I think everyone should have a budget

If I asked you what you spent on clothing in February could you tell me? What about groceries? Entertainment? A lot of people have no idea how much they spend on these (and other) categories every month. This is because they don’t have (or don’t properly use) a budget.

Most of the time, the numbers are all different, too. $100 on clothes in February, $350 on groceries, $75 on entertainment. $220 on clothes in January, $290 on food, $160 on entertainment. That’s if they can even remember what they spent in the first place!

Why You Need a Budget

I personally think having a budget is extremely important for financial success. By having a budget in place, you set boundaries for yourself. If you only have $300 a month to spend on food, then you only have $300 to spend. You feel bad if you spend more, thus, you try harder next month. After a few months of using a budget, it becomes much easier to stick with.

The first month is very hard. I work hard, I deserve nice things. I’m not going to limit myself! Of course, you deserve nice things – but you should only buy things you can afford. Do you even know how much you make after taxes each month? Do you save anything? You know you are supposed to put away at least 10% of your net income each month, right?

I’m only 25, I have lots of time to start saving, I can wait, and enjoy my life right now.

You should never wait to start saving. The earlier you start, the more you have in the end and the less you have to put away each month.

I believe that those who have created and maintained a budget, are a lot more relaxed and comfortable with their spending than those who do not have a budget. I know many people who do not have a budget and they are always worried if they can make it to the end of the month before the money is all gone.

Why do that to yourself? If you would like to financially stable, then I would strongly suggest starting a budget for your family (or yourself).

Creating a budget is easy. Here are few steps to get you started:

  • 1. Figure out how much you make each month, after taxes.
  • 2. Figure out how much your fixed monthly expenses cost you (mortgage, cable tv, telephone, car payments). These are the categories you can’t really do much about.
  • 3. Figure out how much your variable monthly expenses cost you (groceries, entertainment, transportation). These are the categories you can play with a little bit.
  • *Note: If you’re not sure how much you spend every month on things like groceries, entertainment, etc. – just write down what you would be comfortable spending every month.
  • 4. Add up your total expenses and subtract them from your income. Do you still have month left over? If so, good for you! Creating a budget will be simple. If you found that you are short money, then you have some work to do. Either lower or cut out some of your expenses, or start making more money.

Do you use a budget? Does it help you?


  1. kalen

    while i agree that a budget helps many families financially, billy and i don’t really do well with them. we don’t like the constant keeping track of everything, and really – we don’t have a big need to. instead of “allowing” ourselves certain amounts of money, we’re just careful. it’s pretty easy. he automatically has a certain percentage leave his paycheck each month that we never even see – it goes into savings & stays there. our fixed monthly expenses come out at the first and half of the month, and the rest we do with what we want. we are never low though – his account always has money in it as padding.

    we’re just weird though. we’re able to keep it calm and not go too wild but at the same time not have to track every thing we buy. it works for us because we’re big believers in saving for later, but also living for right now. it’s great to think about retirement one day – but who knows what might happen before then? one of us could be disabled/chronically ill by then and not be able to go on vacations/enjoy life, so it’s just a matter of balance for us.

    all that being said, some months we do budget our money just to see where it’s going & it’s pretty interesting 🙂 we spend a LOT on food for 2 ppl. and when baby comes, we’ll have to be more careful i’d say.

  2. Cassie Howard

    i agree that budgets are not necessarily for everyone. the main thing is that, in the end, you are not spending more than you make, and you are saving fo ryour future. 🙂

  3. Erica

    I’m having so much fun tracking my spending and working out my budget. While I agree it’s somewhat easier for me, it’s still a great thing to do.
    the other day I was talking to mom and dad about it and they both told me how impressed they were with how I’m paying off my debt and using a budget, and they (jokingly) asked me to do one for them. I told them I would have, but they said they are okay money wise, just that they are proud and I said its all thanks to you!

  4. Cassie Howard

    awww shucks, thanks! im glad you are doing well with your budget and paying off debt. 🙂

  5. Anita

    Great idea to set up a budget. We use one every month and track all of our expenses too. It really helped us see where we could pare down, like on groceries. It is a bit of trouble to set up, but not too bad to maintain. I use Quicken. I rarely use cash, so I am able to download all my credit and debit card transactions. Most automatically go into the expense categories I have set up, which saves a ton of time.

    A thought re: Kalen’s observations about retirement. I know retirement may seem a long way out, but even putting a little aside each month into a RRSP will really add up, especially if you start in your 20’s. We started making automatic monthly deposits to our RRSPs in our mid-20’s and increased the amount as our salaries increased. I’m so glad we did. I saw my financial planner on Friday to review my financial situation. I’m 50 now, so retirement isn’t all that far off. And, we are definitely going to be okay for retirement and we can definitely retire well before 65. I have friends that haven’t started to plan for their retirement yet, and it really is going to be hard for them now to amass enough wealth to live on (let alone travel on and enjoy their retirement) for a retirement that could last 25 or 30 years.

  6. Cassie Howard

    Hi Anita!
    I agree that a budget can be a pain to set up, I know ours was! The maintaining is super easy though. 🙂

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