“A budget is telling your money where to go instead of wondering where it went.”
That quote from personal finance expert Dave Ramsey pretty much sums it up. Budgeting gives you control over your money. It can also give you peace of mind, reduce stress and help you hit some big goals — whether that’s paying off debt, saving for a house or just not holding your breath at the checkout counter.
The good news? Budgeting doesn’t have to be painful. And it definitely doesn’t mean you have to give up coffee, going out or having fun. You just need a system that works for you. One that’s realistic, flexible and aligned with your values and lifestyle.
Let’s walk through the steps.
The first step to creating a budget is knowing where you’re at. That means taking a good, honest look at your income and spending.
Start with your income. Add up what’s coming in each month — this could include salary, freelance income, rental income or anything else.
Next, dig into your expenses. Go through your last three to six months of bank and credit card statements. (Yes, this can be a little eye-opening. But it’s worth it.) Try to group your spending into categories — like groceries, transportation, housing, dining out, subscriptions, and so on.
You might find some surprises — like how much you’re actually spending on Uber Eats or subscriptions you forgot you had. That’s totally normal. This step isn’t about shame; it’s about getting the facts so you can make informed decisions.
Once you know what’s coming in and going out, you can start thinking about what you actually want your money to do for you.
Set some short-term and long-term goals. Short-term might look like saving for a vacation, buying a new laptop or building up an emergency fund. Long-term goals could include paying off your mortgage, saving for retirement or funding your kid’s education.
Having specific goals will help you stay motivated — and make it easier to say no to things that aren’t aligned with what really matters to you.
There’s no one-size-fits-all budget. The “right” method is the one you’ll actually stick with.
Here are a few common options:
This is a good one if you want to get your spending under control — or if you tend to overspend on cards without realizing it.
Here’s how it works: You withdraw cash at the start of the month and divide it into envelopes for different categories (like groceries, gas and eating out). Once the envelope’s empty, that’s it for the month.
If carrying cash isn’t your thing, there are digital tools that let you mimic the envelope system — like setting up separate accounts for different categories or using reloadable prepaid cards like Brightside.
If you’re not into spreadsheets and want to keep things simple, this is a great approach.
The idea here is to automate your savings and essential expenses. Set up automatic transfers to savings and to pay off bills right after payday. Then whatever’s left is yours to spend on non-essentials — guilt-free.
It’s a great way to build savings without having to constantly think about it.
This one’s for the detail-lovers. With zero-based budgeting, you assign every single dollar a job — whether that’s paying bills, saving or spending. At the end of the month, your income minus your expenses should equal zero.
It takes a bit more effort, but it gives you a lot of control. Apps like YNAB (You Need a Budget) or Mint can help make it easier to track everything.
Budgeting isn’t set-it-and-forget-it. Life happens — car repairs, birthdays, surprise bills — so it’s important to review your budget regularly and adjust it as needed.
Set aside time once a month to compare your actual spending to your budget. Don’t worry if things don’t match perfectly. The goal is progress, not perfection.
If your utility bills were higher than expected, update your numbers for next month. If you underspent in one area, maybe that extra can go toward a savings goal.
Over time, you’ll get better at predicting your expenses and adjusting your plan. The process gets easier with practice.
We always recommend building a little wiggle room into your budget. That might be a “fun money” category or a small buffer for unexpected expenses. The goal isn’t to restrict yourself — it’s to create a plan that helps you live well and stay on track.
Remember, budgeting isn’t about being frugal or boring. It’s about knowing where your money is going and making sure it aligns with your priorities.
Here’s what budgeting can help you do:
If you’re new to budgeting, give yourself a month or two to figure things out. The first month is usually the messiest — and that’s okay. The goal is to learn, not be perfect.
Pick a method that fits your lifestyle, start tracking your spending, and check in regularly to see how you’re doing. Over time, your budget will become second nature.
And if you’re running a small business, don’t forget — your personal and business finances are closely linked. We can help you with both.
Need a hand with personal taxes or cash flow planning?
At True North, we work with small business owners to help them understand both sides of their finances — business and personal. Whether it’s setting up a budget, handling your year-end or sorting through GST and payroll, we’ve got your back.
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