Yes, Budgeting isn’t easy. But bite the bullet and do it anyway.

Melanie ConsMortgage Talk Canada

Let’s be honest, budgeting is the most boring adult thing you can do. You get your first job and you want to finally be able to have fun with your own money. But wait, you want a car, right? You want a house eventually, don’t you? Even if these goals are further down the road, starting to save now is the smartest thing you can do.

Here are two types of budgets that can make “adulting” (aka: budgeting) a little easier:

  1. A Cash Diet – This is a bit of a novelty because it involves, wait for it…ACTUAL CASH. That’s right! No cards are involved at all! Crazy I know, but hear me out. How it works is you start by writing down how much is coming in and how much is going out. MAKE SURE TO INCLUDE SAVINGS! Now I’m not saying that you go and pay your landlord or utility company with an envelope full of cash like you’re Heisenberg or something, but after you calculate how much you need for those bills, you take the rest out in actual physical currency. This allows you to have a physical representation of how much you actually spend on things like groceries, transportation, meals out, etc. If you spend 20 bucks buying something on Amazon, take $20 out of your wallet and put it in a drawer and use it towards your next withdrawal.
  2. Percentage Budgeting – This is the post-grad of budgeting. You’ve learned the lessons of the Cash diet and you’re ready to graduate to something a bit more modern. And you get to use your precious cards again! Here’s how it works: you take your post-tax income and lay it out as 50/20/30. This means that 50% will go toward those fixed expenses like rent, student loans, cell phone bills, you get it. 20% you put DIRECTLY into a savings account or RRSP, keep in mind this is not a fund to use in case you run out of fun money, this is for that major purchase you’re dreaming about. 30% goes to lifestyle and flexible money, groceries, transportation, basically everything you were using your cash for before.

There are other types of budgets out there, but these two are a good way to train yourself to think realistically about the money that you’re spending. Being honest with yourself now about where your money goes is a good way to ensure that your financial future is healthy and you can actually afford to make those big purchases down the road.

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