Life: The Sequel - Step 4

Make a Plan. Make Your Life Easier.

OK. You’re doing great. You’re well on your way to starting your new life on solid financial footing. So let’s keep that momentum going and make a plan that sets you up for ongoing success – aka, a budget. Because to get ahead financially, you need to see what’s coming in is more than what’s going out.

Setting up a budget doesn’t have to be difficult or time consuming, and there are lots of online tools that can make the process easy and painless. The great news is that you’ve probably already started yours. Remember back in Step 2 where we suggested you track your spending for a month? Well if you’ve done that, then you already have a good idea of what your expenses are (and if you skipped that step, now’s your chance to catch up!).

Once you know what your common expenses are, go ahead and divide them into two categories – fixed and variable. Fixed expenses are those must-haves, such as rent, transit, basic food and student loan payments. Variable expenses are nice-to-haves that change every month – such as clothing and entertainment. Once you’ve listed your expenses, take a look at whether the money going out is more than the money coming in. If that’s the case, prioritize your non-essential expenses until your budget turns itself around.

Tips for setting up and sticking to a budget

• Use the RBC Easy Budget Tool to help you organize your income and expenses so you can get a handle on what’s going in and what’s going out
• If you prefer a more automatic approach, use myFinanceTracker to get a clear view of your financial picture with just a few clicks of your mouse. You can create a budget for each spending category and get alerts when you’ve reached your limit
• Keep a close eye on your budget and reassess whenever it’s necessary. Forgot to include your weekly Pilates class? Add it in so that you’re always on top of exactly where your money is going
• Watch our Budgeting Basics video for a step-by-step guide to setting up your first budget