Budgeting for success: Your first lesson for Financial Literacy Month

Setting a proper budget is not only at the foundation of your financial success, it’s a crucial part of staying afloat financially, especially if you are struggling with debt or are living paycheque to paycheque.

November is Financial Literacy Month, which means it is an ideal time to learn all about this cornerstone of financial health.financial literacy month

“Don’t underestimate the power of the budget. It ultimately sets up the framework for your financial success.  It not only helps you stay on track to meet your goals, it’s a great tool to help you more clearly express your needs and wants. A working budget helps you specifically identify areas in which you need to improve. It can also help boost cash flow and reduce the need to use credit,” says Jeff Schwartz executive director, Consolidated Credit Counseling Services of Canada.

“The key to budget success is strategy, committing to your plan and being detail-oriented when you execute your plan,” says Schwartz.

Ready to make a change? Here are some tips for successful budgeting.

What’s your goal?

Before you even set the wheels in motion, define your goal- and be specific. Don’t just say “get out of debt.” How will you do it? How long will it take? Do you have any secondary goals (e.g. put money aside for holiday spending, save up for a vacation, car, down payment on a house. etc.)? Assign short, medium and long term to your goals.

Details, details, details

At the outset, lay out all of your financials on the table. You need a full understanding of all of your expenses and your income.

When you set your budget, make sure to drill down to the details to account for every single penny that you spend currently.

Once you’ve determined your current picture, how can you modify your spending so that you can meet your goals? Slice and dice as much as is reasonable (a very strict budget is too hard to maintain over the long term). Be sure to include saving in your budget, no matter how small.

Be sure to track your spending as you go along.

Change your spending behaviour for big results

Now that you’ve got a plan in theory, it is all about translating it into daily practice, which can be challenging, especially if you are new to budgeting.

Understand that success will ultimately come from your ability to modify your behaviour over the long term.  It can be helpful to “keep your eye on the prize”. Literally. Post visual reminders around your home about what your end goals are. For instance, if your goal is to ultimately buy a house, put pictures of your dream home around. Write motivational messages on sticky notes and post them as well.

If you feel like you are sacrificing on your budget, you may be more tempted to spend. If you remind yourself that each daily action takes you one step closer to your goal, you’ll be more motivated.

Be patient

Financial success by sticking to a budget takes time to achieve, but you’ll get there as long as you stay the course. As part of your budget, make sure that you plan to revisit it monthly, but quarterly at the very least, to see if it is working. Is it unreasonably rigid? Is there room to be more aggressive in debt repayment or savings?

Don’t beat yourself up and quit if you feel like you’re not on track. Make some small changes and get back at it.

Do you have a budget? Do you want to know more about how setting a budget can help you work your way out of debt? Call one of our trained credit counsellors at or check out our free online debt analysis.

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