By Michelle Statz

BDO Debt Solutions

November is Financial Literacy Month

Nov 10, 2021 | 9:37 AM

In the spirit of financial literacy month, it is a great opportunity to sit down and review your finances. This means looking at your budget, your spending and your financial goals.

You should review your budget periodically, but this is especially a good time to do it if you haven’t in awhile. The cost of living is rising and it is always good to know where you stand in terms of your expenses and household bills and how much income you have coming in to cover your expenses. As household utilities tend to go up periodically you want to review your budget so that you are allowing for the right amount in your expenses for all your bills. Keep in mind that these expenses need to be within your income. You should not be relying on credit to pay bill and expenses, and your budget or spending plan should be based on the actual amount of cash coming in from all sources each month.

Once you have created or modified this plan for where your income is going to go, it makes sense that you need to track your spending to ensure you are sticking with the plan. Many people know how to start with the creation of the budget but then do not realize that it doesn’t end there. Although you may know the amounts of your fixed expenses (telephone, mortgage, rent, etc.), you may not realize how much you are spending on the flexible items. Most people know what their fixed expenses are, but many others do not know what they are spending on the flexible items such as groceries, gas, entertainment, eating out, etc. It is easy for spending to get beyond your means if you are not keeping track of those flexible expenses. This does not mean you cannot eat out or have entertainment. It just means that you want to put a limit on it, that is practical and that fits into your budget. You may decide for example, that you are limiting eating out to $150 per month. It then becomes important throughout the month to keep track of your spending on eating out because you do not want to spend more than $150 as that is all that is allowed in your budget.

Groceries is another expense where it is very easy to overspend. Who has not gone to the store and come home with more than what you had on your list? It is easy to spend more than what you planned, but this habit can be corrected. By watching the flyers for sales, you can find your best deals. Also, it is a good idea to meal plan. If you plan your meals for the week on Sunday and build your grocery list from there, you can reduce your spending. Of course that takes discipline as well – like not going to the store when you are hungry, or not being tempted by the treats or other sale items that you think you need right now but maybe you can do without. Stick to your list!

These are just a couple of tips, but by watching your spending closely on the flexible items, and trimming any that you think are unnecessary, you may find more money in the budget left over for your financial goals. Most of what we want to do or have has a price tag and the way we will achieve those goals is by saving, which comes from keeping close track of our monthly spending. That means that in the end, budgeting and tracking spending is a very positive practice. It is going to help you save for those things you want as well as secure your financial future.

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Michelle is a Licensed Insolvency Trustee, and a Chartered Insolvency and Restructuring Professional. She is a Vice President with BDO and works out of the Regina office. She has been in the industry since 2001 and believes in the system that allows individuals to find solutions to their financial challenges so that they can take charge of their finances once again.

If you are having trouble making ends meet each month, finding the right debt solution can help. Visit the BDO Debt Solutions website for more information about bankruptcy, or call 1 855 BDO DEBT to book a free, no obligation consultation.