Your bank account is set up in Canada. Now it is time to benefit from using a budget planner and expense tracker.
Banking and budgeting are two different processes that work together. Banking sets you up for success, but budgeting helps you stay on top of your financial responsibilities. When you switch your thought process from banking to budgeting in Canada, you discover that you can spend less and save more. From tracking your expenses to planning your future spending, this is what you need to know about setting up a budget for yourself.
Similar to other countries, money transfers and banking in Canada are conducted at a bank’s branch, over the phone, or online. At this point, you have opened a bank account in Canada and have set yourself up for money transfers and deposits, and received a credit card. This is also important for building a credit score, which can impact your ability to rent a home or even acquire a phone plan. All of this is necessary before you can begin budgeting.
Saving vs. Investing
A mixture of savings and investments is important because these two methods complement each other. Savings provide a financial cushion in case you need to cover the costs of an emergency such as unexpected bills or sudden unemployment. Investments work towards growing your money, so you can fund your future plans. However, in order to save and invest your money, you must first learn not to spend it all first. This is where budgeting comes in.
Start by creating a budget planner since the costs of food, entertainment, transportation, and housing can vary from city to city. A great method for managing these expenses is to plan out your finances and stick to the budget. This is doubly important when you are still looking for employment.
So, what is a budget planner? This is a working spreadsheet of your projected monthly expenses. For example, this would be your transportation costs, payments, utilities, credit card bills, services, groceries, medical, clothing, savings, investments, and personal expenses.
You can take this idea a step further by splitting it into a household budget planner that is specific to home-related finances and a personal budget planner that is specific to your regular purchasing habits. Since everyone allocates their money towards these two expenses differently, dividing these budgets can identify unnecessary spending in your routine. This way you can save and invest more!
Another method of budgeting is to try expense tracking. This maintains a daily record of your spending as well as any tracking receipts, invoices, and additional expenses. Also, this is accommodating for small businesses as well as personal budgeting habits.
So, how does a personal expense tracker work? There is a wide variety of online expense trackers that you can choose from. Unlike a budget planner, which plans your future spending, an expense tracker helps to manage your finances as you spend your money.
When you track your expenditures, it provides insight into why you are in debt and how you got there so you can strategize how to get yourself out.
Learning How to Budget
The best way to utilize money is to be aware of your spending habits. Once you understand how much money you spend and what you are spending it on, then balancing your income and expenses will save you money in the future.
Budgeting is good for your financial health. When you have your banking, savings, and investments set up, budgeting those finances does not have to be stressful. Eventually, budgeting will be a part of your routine and watching your expenses will feel like less of a chore and more of a habit.
*Opinions expressed are those of the author, and not necessarily those of Student Life Network or their partners.