7 Simple Steps to Creating a Personal Budget

Personal budgeting is the most crucial step for all Canadians to take in order to build personal wealth. While the "B" word scares most people or it seems more like a chore than a benefit, there are some easy things that you can do in order to make it work for you and your household. Follow these 7 steps to building a personal budget that works for you:

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1. Start your personal budget by collecting your last 3 months of expenditures. Look for your bank statements, any cash transactions and receipts if you have them. You will also want to look through any of your credit card statements. Look for what you purchased, if there were any fees associated with your charges, any monthly bank statement charges and try to notice any habits. Do you spend the same amount monthly? Do you have some expenses that seem to be the same every month? This is a very important step for all Canadians to take for their financial future.
   
2. Next, locate any and all documents that relate to your personal income on a monthly basis. If you are on a salary, this will be a simple step as your income is consistent for every paycheck. If you are on commissions, gather up 3-6 months of income statements and take an average.
   
3. Now that you have completed this important step, you will need to compare your income to expenses to see what it left. This is a step that many people fear- but, it is important for citizens of Canada to determine their discretionary income every month.
   
4. Now that you have an idea of what amount of money that you have available at the end of every month, you should start looking at the expenses that you will be able to reduce or eliminate. Canadians should review their expenses carefully to determine how they can leverage additional monthly income. This extra income can be used to reduce personal debt as well as to begin saving for the future.
   
5. Now that you have the budget outlined, you can begin to prioritize your personal debts. Start by reviewing the interest rates and listing each debt starting with the highest interest rate first. Also, list the payment that you are currently making on each credit card.
   
6. Now that you have outlined your budget and your discretionary income available, you need to start planning your financial future. Outline your personal short term and long term goals.
   
7. The last step is to have patience and stay the course. Personal budgeting will not become a habit overnight. You will have to review it often, track your progress and make adjustments when necessary. It takes approximately 21 days in a row to build a habit; so, keep things moving until your personal budget does not require any thinking on your part to manage.

So, Canadians need to take the steps listed above to create and manage a personal budget for financial success.
For Canadians in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Newfoundland, New Brunswick, Prince Edward Island, Nova Scotia, Canada