Home Budget Calculator

Managing your monthly budget can be difficult and frustrating. One of the most important aspects of controlling your budget is to determine where your money is going. This calculator helps you do just that. We’ve also prepared a few tips to help you get a better handle on the budgeting process so you can take greater control over your finances.

Using This Calculator

By entering your income and monthly expenditures, you can see how much you have left to save and where your money is being spent. In addition, press the view report button to compare your budget breakdown to our targets which can help identify areas for improvement.

Do You Need a Budget?

Does your household need a budget? Are you experiencing any of these issues?

Difficulty paying bills
Difficulty paying off debts
You have trouble keeping track of your money
You’re having trouble saving money
Want to plan and save for future purchases or events
Want more money for the things that are important to you
Experience stress in your relationship due to money issues

Even if you only said “yes” to one of these items, you’ll benefit from a household budget.

A budget helps you manage your income and expenses to get a handle on exactly how much money you have and where it goes every month. A budget gives you a guideline to follow and can help you guide your spending to reach your financial goals.

A budget will help you:

Prioritize your spending
Reduce expenses
Save more money
Pay off debts
Eliminate personal and relationship stress

Home Budgeting Basics

If you’re feeling uncertain or apprehensive about your household budget or your budgeting skills, don’t worry. Preparing a budget doesn’t have to be complicated, and can be simplified into a straightforward 5-step process:

1 – Set Goals

Why do you want to set a budget? Start by identifying what your financial goals are. These should include both short-term and long-term goals.

For example:

Paying off your debts
Saving for retirement
Saving to buy a new home
Planning for future education (your or your child’s)
Travel

Saving for these goals should absolutely be a part of your budget. They will help inform your decisions and help you prioritize your spending habits.

2 – Identify Income and Expenses

After you’ve set your goals, you need to identify your income and your expenses. Start by tracking all your expenses for a week to get a sense of where money goes during your day-to-day. Expand on this list and track expenses for a month, recoding everything. Looking at a full month of expenses will give you an accurate image of how much you’re spending on average.

Record all these items in a spreadsheet and compare it to your monthly income. It might surprise you to see how quickly small expenses add up and how large expenses can be more manageable than you think. If you’re spending more than is coming in, you might be at risk of falling deeper into debt.

Note: Debts and loans count as expenses but will eventually be paid off. Don’t forget them in your list of expenses.

3 – Evaluate Your Needs and Wants

Needs are, as you’d expect, necessities or requirements that are essential for your life. These include food, housing, clothing, transportation, and medicine.

Wants are those things that you’d enjoy having but could live without. For example, eating out when you could buy groceries and prepare meals for yourself is a want, not a need.

What are your needs and wants? Identify them by going through your expenses. For example, if you can brew a cup of coffee at home and buy it in bulk, do you really need to buy one every day? This doesn’t just have to be for the basics and day-to-day items, either. If you’ve been eying a beautiful new car, but a second-hand or older model will work just as well, that would also be a want vs. a need.

4 – Build Your Budget

Now that you have the data you need to work with, it’s time to put it all together. You’ve got to compare your expenses with your income and prepare budget figures accordingly. Create a month-to-month document with budget lines for all your expenses. It’s important to ensure your budget is balanced, or that the expenses are never higher than your income.

If you do find your budget doesn’t match with your income, you need to make some cuts. Watch for small recurring expenses, and cut those first, alongside any “wants,” and see how that impacts your budget. Be realistic and honest with your budget. It’s of no use to you if you fudge the numbers a bit to make your expenses look less ominous or overwhelming! This is your roadmap to success. Use it accordingly.

If you have any leftover money—a surplus—it’s important to use it wisely. If you’ve budgeted for monthly savings or an emergency fund already, your surplus can be redistributed to other areas to help with you budget. Alternatively, that surplus can become your emergency fund.

5 – Use Your Budget

You’ve built the budget and created your plan—now stick to it! If your pay periods are irregular due to the nature of your job, or you’re paid on a set schedule, start planning how you use your paychecks to get you through the month. For example, rent is due the first of each month, so with a bi-weekly payment schedule, you know you’ll need to have that money set aside by the end of the month.

Monthly bills, too, should be accounted for. You should track your progress and monitor how closely you adhere to your budget, updating as needed and as you achieve your goals or as you modify your strategy.

If you’re still struggling to create a budget, or you find your debts overwhelming, contact Baker Tilly Ottawa Ltd. today. If you’re feeling stuck, we can help you regain control. As a Licensed Insolvency Trustee, we can substantially reduce and eliminate debt with federal government-licensed bankruptcy and consumer proposal services.

Home Budget Calculator