Canadian Living; Creating a Budget for Your Rent, Bills, and More
Canada's housing markets fluctuate, as do others on a global level. Renting has become a popular alternative to homeownership for several reasons, including, but not limited to foreclosures, downsizing, and an unstable economic climate that makes investors and potential homeowners shy away from buying.
With the increasing cost of living in Canada, many households are implementing strict spending budgets to make sure they can meet their monthly bills and live in a financially responsible manner.
Understanding What a Budget Is
A budget is the roadmap of your income and bills over an extended period of time and the allocation of funds made to monthly bills. A household budget may include line items such as:
- Credit Card Payments
- Student Loans
- Child Care
Household budgets are very specific to the needs of those that live there; however, there are some universal elements that appear in all budgets, such as income, fixed expenses, and flexible expenses.
The following is one common budgeting equation:
Income - fixed expenses - discretionary expenses = net income left over for the time period (usually month).
- Creating a Budget
- What is Budgeting & Why is it Important?
- Your Budget Methods
- Budgeting & Forecasting
- Why You Should Budget
- Rent Increases & Non-Payment of Rent
- Paying Rent
Millions of renters use at least half of their income to pay rent, leaving them with very little to cover remaining expenses. When this is the case, budgeting is critical to make sure that all bills are taken care of in a timely fashion. The following are a list of some of the basic income/expense categories that can be helpful when making a budget. Grab a pen and paper and read on.
- As long as you are working steady hours, income can be projected on a daily, weekly, monthly, or yearly basis.
- It is important to budget your net pay, not your gross pay, as this does not factor in taxes and other paycheck deductions.
- Make sure to keep pay stubs and bank statements as this will help when making your budget.