One size does not fit all: Creating a budget that will work for you

July 15, 2025

Sara Maginn Pacella

Anyone can build a budget. Building a budget that balances, that helps you meet your long- and short-term financial goals, and that you can stick to can be the tricky part. An effective budget will cover all your basic needs (food, shelter, health care, child care, etc.), some of your wants (entertainment, gym memberships, restaurants, subscription services, etc.), and savings, including the set up of an emergency fund.

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Produced with Google Notebook LM Using AI Narration

Why does budgeting matter?

A budget is like a roadmap for your future, helping you make informed decisions that will ultimately help you reach your financial goals.

Eileen Wylie is a real estate agent with over 30 years of experience in the industry. As part of her services to clients, she helps them make informed decisions about their housing budgets. Wylie tells HCM Dialogue that a common mistake people make about their expenses and budgets is “just ballparking what they are spending.” She advises that, “To be fully aware of your budget, you should calculate everything you spend money on every day, week, and month. Consider the methods you use to transact. Many people are largely debit card-based, some rely on their credit cards, and some still use cash. Look at bank statements for the past several months, and don’t forget to include smaller items like your daily coffee, the energy drink you pick up during the afternoon, and any other small regular purchases in addition to the bigger ticket items.”

Choosing the right budget system and expense-tracking method

Everyone is different, so finding a budget system that you’ll want to follow is a key factor in the overall success of your budget. Here are some systems to consider:

The 50/30/20 budget

This method divides your budgetary items into three main categories: 50 per cent goes toward your necessities (including rent, mortgage, food, and transportation), 30 per cent goes toward your wants, and 20 per cent goes toward savings and personal debt. Simple calculators, like the one available on Nerdwallet, allow you to plug in your monthly after-tax household income to help you build a framework for the 50/30/20 budget.

A cash-based approach, a.k.a. “the envelope system”

Made famous in Canada through the popular television show Til Debt Do Us Part, people using this method set cash limits for each expense category and place the physical cash in the envelope (or jar), and once money in that category is gone, you can’t spend any more cash on that specific category that month. There are budget apps (like Goodbudget or Honeydue) that can help you create digital envelopes and tracking for those who want to explore this method without the physical cash.

Pay yourself (and your savings) first

The first bill you pay every month is to your savings plan. With the rest of the money, you pay your bills and necessities and then spend the remainder on whatever you want. The pay-yourself-first budget can be combined with different types of savings plans.

Zero-based budget

You create a plan for your budget so detailed that every cent of your income is allocated to a specific expenditure, including rent, transportation, savings, and each coffee purchased, leaving you with zero dollars remaining at the end of each month.

” A budget is like a roadmap for your future, helping you make informed decisions that will ultimately help you reach your financial goals. ”

How to stick to a monthly budget

When creating a budget, you’ll need to adjust based on your needs and wants and make some personal and financial sacrifices to meet your goals. For example, you may spend more money on housing but less on transportation costs because you can walk or bike to work instead of using a car.

Some tips to help you stick to your monthly budget, particularly when you are new to budgeting, include:

Take 48 hours to sleep on a bigger purchase, particularly if it’s a want instead of a need;
Meal plan and grocery shop with a list;
Gamify the budgeting process and set aside some money for a treat to reward yourself when you reach a goal; and
Automate bill payments to ensure necessities are prioritized and to take some of the work out of the budgeting process.

Making room in your budget for life changes

At a minimum, it’s recommended to review and tweak your budget annually. It’s also considered best practice to adjust your budget during any significant life change, such as a pay raise, a new home, or the arrival of a child.

New expenses can be applied to any major life change. Using the example of a new home, Wylie says, “Once you purchase, there will be items that you need to spend money on that you have not in the past. It can be funds toward decorating, like paint, or small repairs.” She also mentions examples of additional maintenance costs when owning a house that aren’t in a renter’s budget, such as buying gardening equipment and outdoor furnishings, hiring professionals for window and gutter cleaning, or paying for furnace servicing and filters (which need to be changed regularly).

Wylie reminds clients that the range of expenses that go toward housing can be as high as 33 to 39 per cent, and that housing costs for buyers are not just the mortgage; they also include real estate taxes and condo maintenance fees.

When times are tight, try these budgeting tips that work

Pay with cash and set aside your change for savings
Grocery shop generic brands instead of name brands
Build your weekly meal plans around fruits and vegetables that are in season and items that are on sale
Consider rotating streaming services instead of paying for several at once
Research internet, cable, and phone providers’ prices, and contact your existing provider to negotiate a better deal (or switch to a plan that offers a better deal)
Use the library to gain access to books, e-books, DVDs, and more at no cost
Sell and buy products on sites like Facebook Marketplace, Craigslist, or local buy-and-sell groups

In the end, progress beats perfection

Starting with a budget, building a budget spreadsheet, and saving money will take time. The longer you practice budgeting, the easier it will get. In time, you will find the right money management tracking system to help you meet your financial goals.

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