Young people demonstrating increasing financial savvy
Learning how to save well and spend wisely is a skill
anyone would benefit from learning. Creating a budget is one of the best ways
to get your finances on track. Encouragingly, that message seems to be sinking
in with young Canadians.
According to a recent MasterCard Canada study, 40 per
cent of Canadians ages 18 to 34 have a budget in place, ahead of those ages 35
to 65 (33 per cent).
Drawing up a household budget doesn’t have to be
complicated, either. Start by recording any and all sources of income you
receive each month, which will give you an idea of how much money you have to
go around. Then list all your monthly expenses, big and small. This list should
include mortgage or rent payments, car insurance and gas, loan or credit card
payments, bills and a monthly amount for things like food, clothing,
entertainment and other expenses. It’s also a good idea to set aside some money
each month for those inevitable extra expenses, like unforeseen car repairs,
dental bills or home repairs.
If your expenses exceed your income, you may have to
look for ways to cut back or, ideally, increase your income. However, if your
income exceeds your expenses you now know how much spare cash you have to use towards
saving for things like RSPs, a new car, a new home or other items. By sticking
to your budget you can take control of your finances and give yourself some
peace of mind.