How to make a budget

How to make a budget (1 min 49 s)

Added on April 21, 2015

Description

When you draw up a budget, you have to keep track of your income and expenses. But how do you make a budget and set a realistic savings goal?

  

How to make a budget (1 min 49 s)

Added on April 21, 2015 | Desjardins Group

Note: The text in square brackets describes audio and visual content in the video other than the dialogue or narration.

Christian is really happy! He just landed a summer job!

And it's perfect timing too because he wants to buy a laptop before CÉGEP starts in September. To make it happen, he needs to know exactly how much he's making and spending; it's called “budgeting.”

But how exactly? Should his budget be monthly, bi-monthly, weekly?

And how does he make a realistic savings goal? Christian needs to make a list of all his income and expenses, and check that the balance is equal or positive. His savings balance, his employment income, and even any cash gifts all count as income.

For expenses, he needs to include tuition, his cell phone plan, transportation costs, the amount of savings for his computer and any summer extras he has planned!

Not everyone's list of income and expenses is going to look just like Christian's, but one thing is for sure: the result should be positive.

This will help Christian see how realistic his goal is. If budgeting can help make his project happen, that's great, and if he needs to review his income or expenses, he can make informed decisions.

Christian also has to think about how often he wants to put some money away, every payday for example. Lastly, he should set a savings deadline for when he wants to reach his savings goal.

A little financial planning can see that he starts the school year with the laptop he wants, stress- and debt-free. More and more financial institutions are providing online budgeting tools for their clients.

It's not always a blast to budget, but there are obvious benefits to doing it: less uncertainty, money when you need it, but most importantly, learning how to manage your finances.