A family budget is a method used to track all sources of income and expenses, with the intent of balancing both sides of the equation. Things accounted for in a typical family budget include fixed expenses, monthly payments, insurance, entertainment and savings and much more.
Essentially, building a family budget allows you to allocate expected income to expected expenses and savings. In order to achieve an accurate picture, you need to account for your regular essentials, as well as debt repayments and personal spending deemed to be non-essential.
Once you have your columns of expenses and income aligned, if the total amount of your expenses is greater than your income, then you need to work on cutting back on your spending, or trimming some of your expenses.
On the other hand, if your monthly income exceeds your total expenses, then you are in a good position to apply the excess amount towards future savings goals.
Preparing a family budget is simple and can be as easy as writing things down with a pencil and paper. You can also tap into a wealth of available resources such as spreadsheet software, money-management software and online money-management and spending-management websites, such as Mint.com.
Any reproduction, in whole or in part, is strictly prohibited without the prior written consent of National Bank of Canada.
The articles and information on this website are protected by the copyright laws in effect in Canada or other countries, as applicable. The copyrights on the articles and information belong to the National Bank of Canada or other persons. Any reproduction, redistribution, electronic communication, including indirectly via a hyperlink, in whole or in part, of these articles and information and any other use thereof that is not explicitly authorized is prohibited without the prior written consent of the copyright owner.
The contents of this website must not be interpreted, considered or used as if it were financial, legal, fiscal, or other advice. National Bank and its partners in contents will not be liable for any damages that you may incur from such use.
This article is provided by National Bank, its subsidiaries and group entities for information purposes only, and creates no legal or contractual obligation for National Bank, its subsidiaries and group entities. The details of this service offering and the conditions herein are subject to change.
The hyperlinks in this article may redirect to external websites not administered by National Bank. The Bank cannot be held liable for the content of external websites or any damages caused by their use.
Views expressed in this article are those of the person being interviewed. They do not necessarily reflect the opinions of National Bank or its subsidiaries. For financial or business advice, please consult your National Bank advisor, financial planner or an industry professional (e.g., accountant, tax specialist or lawyer).