Tips for Creating a Realistic Budget

By: Karyn Silliker, Meridian’s Aylmer Branch Manager

Budgeting isn’t a dirty word, yet for many people the process of creating and living on a budget is seen as confusing, restrictive and scary.

“Creating a budget is actually a very straightforward process,” says Karyn Silliker, Aylmer Branch Manager, at Meridian, Ontario’s largest credit union. “Budgets aren’t difficult but they require organization and discipline in order to be successful.”

Meridian offers the following tips to help you create a realistic and successful household budget:

  1. Take an Inventory of Your Income

In order to find out how much you can spend you first need to calculate how much money you have coming in. Start by listing all your sources of monthly income including your paycheques, government tax credits, assistance or grants. Be sure to calculate your net income as opposed to your gross income.

  1. Monitor your monthly spending

Create a listing of all your expenditures throughout the month. File all your spending under two categories, fixed or variable. Fixed expenses are expenses that must be paid on a regular basis and the cost stays relatively the same each month. Examples of fixed expenses include your mortgage/rent, childcare and utilities.   Variable expenses tend to fluctuate each month such as groceries, clothing and gas.

Tally your monthly expenses and subtract from your income. If you’re not balancing or ending with a surplus you either have to cut back on your spending or make more money to make up the difference.

  1. You Don’t Have to Go At It Alone

Whether you hate math or are confused by financial jargon, when it comes to budgeting you don’t have to go at it alone. From user-friendly computer budgeting programs to free online budget worksheets, anyone can find an easy to follow budgeting system that works for them.

You can even work with a financial professional to create a solid budget. Meridian offers its Members free budget counselling to show them how to properly create a realistic budget that factors everyday costs and expenses while encouraging ways to save up for that unexpected rainy day.

  1. Be Realistic

“The top reason why budgets fail is because people are too unrealistic,” says Ms. Silliker. “In my experience, I find people become too rigid with their budgets and in the end they give up on it completely.”

When trying to trim down on your expenses, be mindful of what you’re really willing to sacrifice and compromise on. For example, if you’re spending a lot of money eating out, then consider scaling back by making dinner at home and packing a brown bag lunch to work. Remember, you don’t have to deprive yourself completely but instead make small, consistent changes to your spending habits and that will make a big difference.

  1. Nothing is Written in Stone

When it comes to budgeting, nothing is written in stone. Ms. Silliker recommends that personal and household budgets be revisited and reassessed every other month. “Life changes and so should your budget. I can’t stress enough that budgets are not about deprivation, but instead about make your money work as hard and smart as you do.”

To learn more about financial planning visit or come and visit us at Meridian’s Aylmer branch located at 36 Talbot Street West.