- Personal budgeting is an important element of saving by creating a structured way to spend your money.
- There are clear and defined steps one can take to help you achieve your budgeting goals—including personal money management programs and budget tracker apps.
- Whether you’re a veteran of budget creation or budgeting for beginners, a commitment to efficient spending is the key to success.
Regardless of your financial situation, learning how to save money and budget effectively are essential strategies towards building lasting wealth. Without them, even high earnings can be quickly lost or fall short of their full potential. In this article, we will look at easy ways to reach your goals and share simple tips to help you budget better, which works hand-in-hand with saving more money. By optimizing your spending habits, you’ll free up more capital for strategic investing—a topic we’ll dive into in another article.
What is Budgeting?
In its simplest terms, personal budgeting can be defined as creating a structured approach to managing your finances. A good budget is detailed and prioritizes efficient, necessary spending while reducing wasteful expenses. It also empowers individuals to uncover ways of increasing savings, which can then be reinvested to build wealth and support long-term financial security.
Unless you are a high earner, a key consideration for most people will be how to create a budget on a low income. Although a lower income gives you less margin for error, the same principles required for all income brackets: spending discipline, cost control and discretionary flexibility. With the disciplined use of these tips, almost anyone can make a budget work toward their wealth-building goals.
Budgeting for beginners: Five tips to manage your money wisely
Start with a defined goal
Like with most plans, defining your long-term goals is key to building a successful budget. Goal setting is the motivational foundation that will keep you disciplined and resistant to impulse buys that can throw you off course. Whether you’re saving for a dream vacation, building an emergency fund, or working toward a down payment on a new home, the most important thing is to define your goals from the start. That clarity is what keeps you motivated and moving forward.
| Lettre | Goal | Description |
|---|---|---|
| S | Specific | What will be accomplished? What actions will you take? |
| M | Measurable | What data will measure the goal? (How much? How well?) |
| A | Achievable | Is the goal doable? Do you have the necessary skills and resources? |
| R | Relevant | How does the goal align with broader goals? Why is the result important? |
| T | Time-Bound | What is the time frame for accomplishing the goal? |
One of the most popular structured approaches to goal setting is the SMART method. The method includes clear goals that define key outcomes and establish shared expectations for performance and growth. This approach removes guesswork, defines a clear timeline, and makes it easier to track progress and spot missed milestones.
Watch out for outlier expenses
Since budgeting often involves the same recurring bills and expenses, it’s easy to let your guard down. But staying on top of your finances means actively tracking everything going through your account. Checking your balances weekly helps you catch unexpected or forgotten charges—like random app subscriptions and unauthorized bank fees. If you spot a subscription you’re no longer using, cancel it right away. The goal is to only spend on things you truly need or have deliberately chosen as part of your discretionary budget.
Consider a set spending framework
Life is expensive, and most of us juggle a set of recurring bills and spending commitments every month. It can get overwhelming fast. How much should you be spending in relation to your income? What’s the right spending benchmark to follow? This is where having a set framework comes in. By devising an allocation strategy, you can allocate money in a formulaic way that keeps your spending commitments aligned with the master plan.
For example, the 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. So, if you earn $3,000 in a month, the application of the rule would see you spend $1,500 for needs (rent, groceries, utilities), $900 (dining out, entertainment, hobbies) for wants and $600 for savings or debt repayment.
Whatever allocation path you choose, stick to your plan and save as much as possible along the way.
Set Up an Emergency Fund
While it is advisable to have a pending framework in place, it won’t always be possible to stick to the script. A surprise expense—like a leaky roof or car trouble—or loss of income via unexpected job loss can throw things off. Without a backup plan, your budget can fall apart fast.
That’s why building an emergency fund quickly is an important element of budget tracking. Setting aside a small percentage of your income (we recommend between 2 to 5%) for unexpected costs helps you stay prepared for the stuff that’s bound to happen sooner or later. Akin to insurance, having enough emergency fund money can cushion your budget and keep it from going off the rails.
Review your budget periodically and share it with someone you trust
A budget is only as strong as its foundation and your ability to adhere to it. That’s why it’s important to check in regularly to make sure your plan still makes sense and you’re following the spending roadmap you laid out. Sharing your plan with someone you trust each quarter is a great way to boost accountability from a neutral perspective.
No matter which budgeting path you choose, applying these tips will set you on the right track. With clear goals and consistent commitment, you can achieve your financial objectives and build a stable financial future.
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About Skyline Group of Companies
Skyline Group of Companies (“Skyline”) is a fully integrated asset acquisition, management, development, and investment entity.
It is comprised of companies that provide services in real estate management and development, as well as clean energy management and development.
Skyline currently manages more than $8.23 billion across its real estate and clean energy platforms.
With approximately 1,000 employees across Canada, Skyline works to provide safe, clean, and comfortable places for tenants to call home, great places to do business, sustainable solutions for a greener future, and an engaging experience for its investors.
View Skyline’s 20th Anniversary celebration video to see how Skyline is grounded in real estate, powered by people, and growing for the future.
For more information about Skyline Group of Companies, please visit SkylineGroupOfCompanies.ca.
For media inquiries, please contact:
Cindy BeverlyVice President, Marketing & Communications
Skyline
5 Douglas Street, Suite 301
Guelph, ON N1H 2S8
cbeverly@skylinegrp.ca