Budgets are a practical way of managing day-to-day finances. Learn to set up a budget, track your expenses and maximize cash flow.

Build your budget

Start by making two lists: one for income sources and another for expenses. In the income list, include the money you expect to receive through paycheques and other sources (e.g., gifts, bursaries, etc.). The expense list includes all monthly living expenses (e.g., rent, utilities, phone, food, entertainment, etc.). When you compare the two amounts, you can realistically assess your cash flow and prioritize spending.

Once you create a budget, you need to track and tune it. Try to utilize the 3 C’s:

  • Convert existing assets to cash
  • Create more income
  • Conserve the money you have by cutting costs

Convert existing assets to cash

An asset is anything you own that has value. If your expenses are greater than your income, consider selling equipment, supplies or clothing you no longer use or want. Take advantage of textbook buyback events at the beginning and end of each term. Check buy, sell, trade listings online for other ideas.

Create more income

Earn more income with a part-time job, by selling unused items or, most importantly, investing. Be sure to update your budget to reflect additional income, so you don't misuse the additional money you're earning.

You can also fund your education through RRSPs, RESPs and lines of credit.

Government of Canada // Education Funding

Conserve the money you have by cutting costs

One benefit of being a student is that many companies, for example, Apple Music and Spotify, offer student discounts. You can also switch your bank account to a Student Account so that you are paying zero or lower monthly fees, shop using grocery coupons and rewards points, use your u-pass to avoid parking fees and vehicle maintenance and use Facebook’s textbook buy and sell pages to save money on books.

Budgeting tips

We often spend money without thinking too much about it. But good budgeting means keeping track of all expenditures, even the small ones. Whether you pay for something with cash, cheque, debit card or credit card, record the purchase. Review your expenses regularly and use a budget template so you are aware of where your money goes.

A need is a necessity, such as housing or food. A want is something you'd like to have, but isn't a necessity. For example, you might want another hoodie or a new pair of shoes, but if you already have a nice hoodie and shoes that are in good condition, those are wants, not needs. Be careful when spending on wants. You can divide your expense list into wants and needs to better assess cash flow.

You can also divide your list into fixed, flexible and luxury catetories. Fixed expenses include things like rent, car payments and phone plans. Flexible expenses might change from one pay period to another and include things like groceries and gas. Luxury expenses are often the items in the "want" (vs. need) category, for example, entertainment or eating out.

After budgeting for necessities and before purchasing wants, put some money from each pay cheque into a savings account to use during emergencies. Generally, 5-10% of each pay cheque should be added to your savings account.

Financial experts recommend these budgeting guidelines: 70% for current bills, 20% for future/upcoming purchases, 10% to be invested for long term.

Some banks have a simply save feature to transfer anywhere from 5 cents to 5 dollars to a savings account every time you use your debit card. Ask your bank about this feature and they can set it up for you.

Apps and online tools

Many apps can help you track expenses and stay on budget. Apps can help you analyze monthly cash flow, categorize your spending and compare your budget from month to month. When you add a budgeting app to your phone, you develop a fuller awareness of your spending and saving patterns and routines.

The Financial Consumer Agency of Canada's online budget planner is also available for anyone to use.

Budget planner

Money matters
Find more information about a range of financial topics, including budgeting, bursaries, scholarships, student loans, tuition and fees.