Better Budgeting Tips

NLP_2335It’s a new year and it’s time to focus on new financial goals for the coming year.  For many, getting out of debt will be a major focus for the new year.

Where do you start?

Some people will already use some kind of budgeting system; whether it’s an online app, a spreadsheet, good old fashioned pen and paper, an envelope system… the methods are endless and you should use a method that best suits you.  If you’re not tech savvy, don’t worry about trying to wrap your head around a spreadsheet or some of the software out there – use a pen and paper.  If you’re comfortable using a computer try searching online for software such as Quicken, Mint, You Need a Budget as they’re all useful.  No matter if you’ve budgeted in the past or not, it’s always helpful to look for some better budgeting tips.

Better budgeting is usually the first step you should consider when looking to pay down debt.  If you’re debt load is so overwhelming that you need to consider filing credit counselling plans, debt settlement, consumer proposal or bankruptcy we can help assess your situation with you to see what option could be right for you, but the process before considering those options starts with better budgeting.

So what tips can we share to budget better?

Here’s 10 simple tips:

  1. Keep goals simple and have a plan – Having an objective in mind to help you focus on a goal. For example, saving for a house down payment, a vacation, paying off debt.
  2. Understand your habits – First, track what’s coming in and what’s going out.  Before you look to the future you need to look at the past to understand where you are at.
  3. Track Everything – Carry a notebook or use an app on your smartphone to track your daily expenses.  As mentioned above – use the system that feels right for you – personally, I use an app on my phone that updates my computer and wife’s phone in real time – it’s amazing.
  4. Use Cash – It’s amazing how much you second guess just how much you really need to buy something when you hand over cash at a register as opposed to a piece of plastic.  Here’s a bonus tip too; use the small change/notes first to pay for things as you’ll find it harder to break into the big ones.  You want cash available, but try to avoid frequent trips to cash machines by withdrawing a lump sum of what you think you’ll need to last you a couple of weeks.
  5. Find out what’s hurting you – After tracking your expenses, review where you think you might be able to make cut backs.  Too many trips to the coffee shop? Need 5 thousand tv channels?
  6. Be mindful of the big stuff – If you’re making a large purchase, such as a TV, do your research and don’t be tempted too easily to stray from you budget if you spot a “Deal” on an upgrade.  It’s easy sometimes to think “the 55 inch TV is only $100 more than the 50 inch…”.  That extra $100 bucks might not sound like much at the time, but that’s the equivalent of 50 coffees you’ll need to sacrifice to make it work so you’ll have to decide if that’s something you’re prepared to do first.
  7. Pay Bills early – Get in the habit of paying a bill as soon as it arrives – don’t wait until the due date.  If you slip up and you’re late, you’ll get hit with late fees.
  8. Plan your shopping – This is a great tip if you normally impulse buy.  Try making a list at home of what you’ll need and add up what it’s going to cost. Only take that amount of cash with you to the store then you won’t fall buying things that were not on your list – it’s easy to throw a few extra’s in the shopping cart and wrack up your bill if you’re going to throw it on a piece of plastic.  You might get in wrong a couple of times and realize you genuinely forgot to put something on your list and you’ll have to make two trips instead of one, but you’ll learn from the mistake and get better at planning ahead overtime.  (Good way to teach the kids too and get them involved).
  9. Emergencies – Give every dollar in your budget a job.  Try to budget 80-90% of your available income and save the other 10-20% for emergencies (they always happen and you don’t want to rely on a credit card being your emergency fund)
  10. Stay positive – Don’t try too much too soon.  If you like coffee, don’t try and cut it out completely – just try to cut back.  If you normally spend $50 per month on coffee, try cutting back to $30 at first.  You have to allow money in your budget for fun otherwise you’ll just get depressed with it all and give up.  Pay more than just the minimums on debts and you’ll feel more positive.

If you want to talk more about budgeting or are looking for options available to help you make a plan to get out of debt, email or call my office today at (519) 622 3773 and let’s get started.  It’s great time of the year to start thinking about a fresh start.  I offer a free consultation service either over the phone or personally in my office in Cambridge.


Howard has worked in our Cambridge office for many years helping Cambridge residents find solutions for debt problems. As a licensed trustee in bankruptcy Howard is able to explain all your options and find a solution that works for you.

Howard Hayes – who has written posts on Bankruptcy Cambridge: The Insider's View from Howard Hayes.

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