Skip to main content
Select Image


Friday, January 7, 2022

The start of the year has us all googling ways to improve our money management, determined to start the year out right. Budgeting may seem overwhelming for the uninitiated or restrictive to those who've tried before and failed, but there's no better time to start over and rethink budgeting for your lifestyle.

It’s time to view budgets as a critical method to help you maximize your spending and saving. So yes, even with a budget, you can still buy that daily specialty coffee.

To get the inside scoop on budgeting, we sat down with Joe Matos, Financial Relationship Manager at YNCU, who shares his top tips to building a better budget and setting yourself up for financial success this year.

1. Be realistic with your spending

If you are left with less money than you would like at the end of each month, then it may be time to sit down and reevaluate exactly how much money you spend.

Make sure you are looking at major recurring expenses, as well as small, impulsive purchases, such as coffee runs, going out for lunch or ordering takeout a couple times a week. While these may feel insignificant, they can really add up and may be the root cause of your overspending.

While planning your budget, you’ll also want to use after-tax dollars, to ensure you are taking into account the full value of your common expenses.

Finally, you’ll want to take into account fluctuations. If you have seasonal or monthly bills with balances that change, use an average to guide you as you plan out your ongoing expenses.

Taking into account all of these tips, you should be able to create a realistic outline of what your spending looks like each month and adjust accordingly as life changes.

2. Use your past spending as a starting point

When planning for the year ahead, we always recommend looking back. By reviewing old bank statements or scrolling through your chequing history, you can get a clearer picture of your spending habits and identify areas for improvement.

Looking through your past year of spending not only outlines the categories that account for most of your monthly spending, but it can also help you see what times of the year tend to be the most expensive for you.

If you know you have a few birthdays in one specific month, go out more often in the summer or tend to go overboard with spending around the holidays, then you can start budgeting for these expenses in advance.

3. Create sinking fund accounts

Now that you know what times of the year tend to break your budget, we recommend setting up a few short-term savings accounts (also known as sinking fund accounts) where you can slowly set money aside in preparation for major expenses.

Whether you have a vacation coming up, a wedding party you’ll be a part of or need to put money aside for a down payment, there’s no better time than right now to start planning financially.

To maximize your savings potential, create automatic transfers from your chequing to savings. Even a transfer of $5 a month can make a big difference the earlier you start.

4. Don’t ignore your retirement

When we’re young, we tend to view retirement as an incomprehensible milestone. With so much time left between now and the age at which we can retire, why bother saving?

In actuality, there is no better time to start! We always recommend paying yourself first by investing in your future self.

Find some room in your monthly budget for retirement savings and have a recurring payment go to your Registered Retirement Savings Plan (RRSP). With compound interest that accumulates on each and every dollar you add into your account, your savings will add up quickly over time.

5. Don’t self-sabotage

Have you ever heard of people giving up on their diet after enjoying a piece of cake because “they’ve ruined all of their progress?”

The same logic applies to some people when it comes to their budget.

Mistakes happen. Major unexpected expenses happen. Cars break down and pets need emergency vet care. At the end of the day, we are all human and life can be unpredictable. But that is no reason to give up on your budget.

Whether you pull money from an emergency savings account, make a withdrawal from a sinking fund account, or need a little extra help in the form of a small line of credit or loan to get back on track, have compassion for yourself and remember that you can get yourself back on track. Just remember to include a repayment plan in your budget, and set a goal and timeline to have all loans repaid.

After major unexpected expenses arise, we understand it can feel discouraging to continue your budget. Luckily, we’re always here to help. Reach out to your local YNCU advisor if you need some extra help or insight during those tough times.

Setting and keeping a budget shouldn’t be stressful! Now that you have a plan in hand, you can take control of your monthly spending, plan for unexpected costs and set your future self up for success.

If you need a little extra help finding a budget that works for you, book an appointment online to meet with one of our experienced financial advisors and design a tailored plan to meet your needs.

Interested in more honest money talk tips? Give us a follow on Facebook, Instagram, Twitter or LinkedIn.