Saving Tip: Budget to Stability

By on October 15, 2011

The latest studies say that most of us Canadians – 70% – are living paycheque to paycheque: if we miss one, it’d be hard to recover.

We could talk about the cost of living, and compare how much that’s increased versus how modest personal income has in the last twenty years.  Or we could have a look at what we’ve got now and figure out how to work with it.

Let’s go with the latter.  Check out the five steps below to help yourself get on the road to financial stability, regardless of where your tax bracket is.

1.       DO IT NOW

The first step, in any plan, is to decide to get it going.  Make the decision, and intend to plow through.

Have a seat, take the time to check out exactly where your cash flow is going.

Start with the money you ‘net’ in per month.  Say it’s $2000.

Next check out your bills: rent, phone, Internet – anything that you pay on a schedule.  Say that comes up to $800.

After that, expenses – fuel, groceries, cigarettes even – anything that you need, but isn’t scheduled.  Say that’s another $400.

Then, debts.  What’s the minimum you have to pay off every month? $200, maybe?

Those are your basics – the ones you know you have to pay:

You have $600 left.  Is your free spending less than that amount?  If it isn’t, it’s time to start rethinking some things.

Which is not to say that you’d have to start spending less right off the bat.  Have another look at the spreadsheet as a whole and see where else adjustments can be made.

Check out your bills.

  1. Shop around and you might find a better rate plan for your phone, Internet, or both.
  2. Doing so could knock, say, $70 off your month.

Be smarter with your expenses.

  1. Have a look at flyers for your groceries or keep up with someone who does.
  2. Start noticing which of the nearby stores sells your cigs the cheapest and go there to buy them.
  3. Speaking modestly, this could save you about $50.

Compare interest rates for Credit Cards

  1. Consider moving your credit card to one with a lower interest rate, if you can
  2.  This makes for good practice if your longer-term goal includes some smart investing
  3. This could save you $15 a month, for example

Your $600 is now $735.  It might not sound like much more, but we’re not done here yet…

After that, what’s left to chop?  Your spending, buddy.  And this is the worst part of it: you gotta look hard at what you’re doing with your free cash and deciding what to chop.  After all, you’re not really a high-roller if you actually don’t have the funds to back it up.

Now to the plan with the $735.


2.       PAY No. 1 FIRST

Budget (example): $200 (towards savings)

You’ve probably heard this one before.  Rule of thumb is 10% or so, per paycheck.  For example, if you make a thousand, save a hundred.

Don’t think about it, just do it; that’s all we’re gonna say about it here.



Budget (example): $150

You’re already putting $200 towards it, so why not put some more to make it go away faster?  It might be painful for the short term, but in the long run it feels nice to prove to yourself that debt doesn’t have to last forever.

Use the full $150 to bully away one area of debt at a time, while paying the minimum for the rest; you’ll get to all of them soon enough.  And while you’re doing it, don’t incur any more.  As much as you can, lay off the credit card.  Hardcore budget crunchers draw the line by just cutting the thing up while they’re still paying it off – we’re not suggesting that, but rather giving an example of how serious you should be on this one (cutting or no).


Budget (example): $100

… Or however much you can; how long it takes to build depends on you.

Rule of thumb on this one is three months’ income, saved up for a rainy day (like when your car breaks down, or you’re in between jobs).

If you like, link this with ‘Pay No. 1 First’ for the first few months to get it going.  This does NOT mean consolidate: you are still pushing $300, whether you keep the endeavors separate or together, all right?

It could take a while, but place this high on your budget.  The faster this is done, the faster it’s out of the way.  You’ll thank yourself when that unexpected expense comes around.



Remaining (example): $285

It would’ve been only $150 if you didn’t price shop – take that for some incentive.

Getting this strict on your budget is tough; it’s important to have that money that you know you can do whatever you want with.

For some of you, this could be a serious budget cut on your regular bar missions or clubbing nights.  But don’t worry; if you stick to a plan, in the long term you’ll be back to some high-rollin’ times; being smarter about it, though, means you’ll have a lot more class and integrity in doing it.

In the meantime, maybe:

Hang out more at your house and make your appearances that much more special to your crew.

  1. Self-explanatory.

Work out instead of knocking back a pint

  1. Good stress reliever.
  2. Maybe you have that gut – might as well kill two birds with one stone.

PS: the way you think of spending from now on should be like the way you threw that stone

When do you know you’re good to go?  Check out the last step.


Once you get to the point where:

  1. Paying off at least your credit card is in sight
  2. Your emergency fund is worth about two month’s ‘padding and rising
  3. You’ve got, say $500 saved up at least,

have a look at what you’ve done so far and start to feel good about it.  You might have even gotten accustomed to a life of spending less while doing it.


At this point, you might want to start thinking about investing; once you’re good, you’re good to ‘gamble’.




About Jonathan

A contributor to the ēgō Magazine movement, with one goal in mind to bring insight to aspiring minds.

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