Costs of Living by Category
How to View These Budgeting Guidelines
These guidelines have been created for someone who really needs to put together a tight budget. If finances aren’t strained in your household, you can choose to be more relaxed and go beyond the guidelines in areas as long as you’re careful to do two things:
- You’re not spending more than you earn, and
- You’re allocating some money towards savings (savings are absolutely necessary for life’s many unexpected expenses. Don’t rely on credit for these unexpected expenses. Rely on money you’ve saved).
The category in these guidelines that people will most commonly exceed is the “Personal & Discretionary” expense category. The guidelines suggest you spend 5 – 10% of your income in this category. However, if you happen to have young children in daycare, have high education costs, take nice vacations, tithe, or have hobbies or recreational interests that aren’t cheap, you’ll quickly exceed the suggested maximum for this category. It’s important to know there is nothing wrong with exceeding this limit as long as your budget balances (your expenses don’t exceed your income).
You may also notice that if you spend the maximum amount in every category, you’ll exceed 100% of your income. These guidelines are only recommended ranges. Life is all about choices, but you can’t choose the maximum amount in all spending categories. Spending more in one category may mean that you’ll have to cut back in another category to make your budget balance. If you live in Canada’s far north or in a city where homes are very expensive, you may have to cut back more than an average Canadian would in the “Food” or “Housing” categories in order to afford your higher living costs.
How to Create a Budget With Irregular or Fluctuating Income
If your income fluctuates, creating a budget with irregular income can be challenging. To make things easier, try using one of these 3 strategies for creating a personal budgeting plan for irregular income. These practical strategies will give you simple but effective ways to make sure you’re not spending too much in better months and have enough to spend in leaner months.
If you’d like to learn more about how to plan for and budget with irregular income and even ask questions along the way, you can in one of our free online workshops.
Getting Rid of Debt
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Find out how much you can afford to borrow and repay, how long it will take, and what it will cost.
Track Your Spending
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