How to make a basic budget – And stick to it

If you’ve ever sought advice on how to improve your financial wellbeing, you’ve probably been told to use a budget. The concept of budgeting seems fairly straightforward, and a simple Google search of “how to budget” prompts almost 3 billion results. You would think since budgeting is such a commonly preached tool and there are plenty of resources available this would mean that most Canadians use a budget, when in fact only 49% of Canadians actively use one (Financial Consumer Agency of Canada, 2019).

However, the fact that you decided to read this article means that you are trying to learn how to budget and get your finances in check. While budgets can vary on their level of complexity, in this blog, I am going to explain the budgeting bare minimums that you need to know and practice to keep your finances on track. Holding yourself accountable each month by following a budget can be difficult, but with these simple steps, you can make an effective and efficient spending plan that can fit almost any lifestyle.


First of all, since we are professionals in the finance industry, here is a PSA on why budgeting is important:

A budget helps you understand how much money you are bringing in, how much you need to live on, and how much is left over for savings. It means analyzing that information and putting it to good use by making a plan for how you can meet your expenses by matching them to your income.

With hard work and discipline on your part, a budget will help you meet your basic needs, plan for your wants, and gain control of your finances.


Step 1: Determine your available monthly income

The first step is to determine the income you expect to receive for the month from all sources (side gigs included) and for all contributing persons in the household. If your income is variable (i.e. commission or hours based), try to estimate the amount you will receive for the month.

Whether your income is fixed, variable or a bit of both, plan to spend only what is necessary to meet your basic living expenses.  Save any extra income for times when your income is lower or expenses are higher than what was expected.

Step 2: Determine your expected household expenses for the month

Make a list of your expected monthly expenses. If you have any financial goals, include the amount you wish to save for those goals (i.e., a trip, or retirement savings) as a fixed expense for every month. Be sure to actually set these amounts aside. One way of doing so is by setting up an automatic withdrawal from each paycheque into a savings account.

Next, you need to estimate your total irregular expenses for the year (i.e. dental, maintenance costs, clothing, and vacations). Divide this amount by 12 to get the estimated monthly expense that needs to be set aside to cover these upcoming expenses. Include this monthly estimated amount as a fixed expense in your monthly budget (i.e., rent/mortgage, phone bill, childcare). Again, be sure to actually set that amount aside monthly to accumulate over the year to cover these expenses as they come due.

Step 3: Choose your budget format

Using a premade budget sheet (many websites are offering free ones like the Financial Consumer Agency of Canada), a budgeting app like Mint, or another format of your choosing like a notebook, fill in your available income for the month and your fixed expenses.  Don’t forget to include the amount you need to set aside for savings and the irregular and occasional monthly expenses mentioned above. A basic budget sheet should include items such as the following:

Budget Sheet, Grant Thornton Limited

If the program you are using doesn’t automatically do so, subtract your fixed expenses from your total monthly income. The income remaining is what is available for your variable expenses. If your remaining funds result in a negative number, you might need to make some adjustments.  Remember, you need to live within your means and not spend more than what is available.

Budgeting is also not just a one-time exercise. Reviewing and adjusting your budget monthly will allow you to stay on top of your income and expenses, plan for the future, and stay out of financial trouble. If you think you will have trouble remembering to check your budget monthly, set a reminder on your phone, mark time to review your budget on your calendar, or enlist a friend as a “budget buddy” and hold each other accountable.


  • Plan your spending around your pay. Set up when and how much you will receive each pay.  
  • Decide which fixed expense or what portion of an expense will be paid with each pay (i.e., rent first pay of the month, credit card bill second).
  • Don’t forget about savings, whether they are to be used for short, medium or long-term goals.
  • Revise your budget regularly and make sure it is realistic. The whole point of a budget is learning to live within or below your means.

If you’re having trouble meeting your monthly budget and are feeling overwhelmed by debt, reach out to one of our debt professionals for a free, confidential consultation. We will explore all debt relief options available to you, provide detailed information, and answer all your questions so that you can make an informed decision based on your financial situation.

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