Good financial planning begins with a household budget. Creating a budget helps you understand where your money is going each month and also allows you to develop a plan for saving. It is important to have a budget so that, you can easily track your spending, keep, monitor, and reach your financial goals.

Budgeting Basics:

Step 1: Know Your Income

Start by calculating your total monthly income. Look at your pay stubs and factor in all after-tax earnings, including benefits, side income, rental properties, investments, pensions, and government benefits like the Canada Child Benefit.

Step 2: List Your Fixed Expenses

Fixed expenses are monthly costs that don’t change. These include:

  • Rent or mortgage

  • Utilities

  • Insurance premiums

  • Car payments

Even though groceries are essential, they fall under variable spending and should be tracked separately.

Step 3: Set Savings Goals

After covering fixed costs, plan how much you want to save. Whether it’s for an emergency fund, retirement, a vacation, or a home down payment, prioritize saving by setting up an automatic transfer right after payday. Paying yourself first is key.

Step 4: Manage Your Debt

Not all debt is equal. Mortgages are typically considered good debt; high-interest debt like credit cards is not. Focus on paying off high-interest balances first. If you’re consistently carrying debt, it may signal you’re spending beyond your means.

Try debt stacking:
Pay off your smallest balance first, then apply that payment to the next one. This snowball effect builds momentum and improves your credit score over time.

Step 5: Track Your Variable Spending

These are the sneaky costs—groceries, dining out, subscriptions, and daily purchases. Most people underestimate how much they spend here. Review your bank and credit card statements to see the full picture.

Step 6: Write It Down

Use a spreadsheet or download our Budget Worksheet – MAINSTREAM MORTGAGES to track your income and expenses. This helps you spot areas where you’re overspending or undersaving.

At this stage, you’ll end up with a surplus (great!) or a shortfall (time to adjust). Don’t beat yourself up—this is about progress, not perfection.

Next Steps: Reduce Debt & Boost Savings

Once you’ve adjusted your spending, the goal is to free up cash flow to pay down debt and increase savings.

If refinancing:
Be cautious—while it can lower payments, it may extend repayment time and increase total interest.

Debt strategies:

  • Consolidate or refinance where it makes sense.

  • Use the debt stacking method.

Savings accounts to consider:

  • RRSP

  • TFSA

  • High-interest savings accounts

Top 10 Budgeting Tips

  1. Get Mentally Ready: Budgeting can be emotional. Be kind to yourself.

  2. Gather Info: Print one month of statements and pay stubs.

  3. Use a Worksheet: Track all income (net) and categorize expenses.

  4. Spot Surplus or Shortfall: Adjust accordingly—spend less, save more, or earn more.

  5. Refinance With Caution: Don’t ignore the habits that got you into debt.

  6. Cut Expenses:

    • Turn down the thermostat

    • Plan groceries to reduce waste

    • Cancel unused subscriptions

    • Shop second-hand

    • Review insurance providers

    • Batch cook and freeze meals

  7. Use Cash for Discretionary Spending: It’s easier to control.

  8. Boost Income:

    • Sell items

    • Rent a room

    • Monetize hobbies

    • Find better-paying work

  9. Set SMART Goals:

    • Specific

    • Measurable

    • Attainable

    • Realistic

    • Time-bound

  10. Involve Your Family: Budgeting works better when it’s a team effort.

Need Help?

Download our Budget Worksheet – MAINSTREAM MORTGAGES to get started.
Have questions or need advice? Contact us — we’re here to help.

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