3 tips to staying on budget

3 tips to staying on budget
Paying cash, staying away from credit and spreading out expenses and income can help you stay within your budget.
  • Paying cash: this is recommended by all budget consultants. Withdrawing the exact amount to cover your weekly expenses once a week will help you stay away from impulse or unnecessary purchases… as long as you don’t head back to the debit machine once you’ve spent the money.
  • Staying away from credit: it’s best to resist purchases offered to you on credit or from a credit line as the interest rates charged are usually high. Credit debt is actually the main reason people seek budget counselling.
  • Spreading out your expenses and income: ask Hydro-Québec or GazMétro to charge equal instalments throughout the year. This will avoid you having big bills to pay in the winter. To help you better manage your budget, you can also ask for your child assistance payments to be paid to you monthly instead of quarterly, as is usually the case.
Setting aside a small amount at each pay for special events (Christmas, birthdays, etc.) helps you meet those occasional expenses without putting a hole in your budget or needing to buy on credit.

For Olga Cherezova, it’s important to educate families about consumption. “Happiness isn’t necessarily in the gifts we buy or in expensive outings,” she says. We don’t always realize that it’s not necessary to spend a fortune to go out with the children: there are low-cost theatrical plays or shows in a cultural centre, parent-child workshops or inexpensive family outings to community organizations, and so on. Some museums even offer free admission once a week. And don’t forget municipal libraries, where you can borrow books and sometimes even movies and toys for free.

The family budget at a glance
  • Shelter: rent or mortgage, electricity, heating, telephone, taxes, insurance, maintenance and repairs
  • Food: groceries, restaurants, meals at work
  • Transportation: public transit, car payments, gas, car maintenance, car registration, driver’s license, car insurance, taxis
  • Clothing: adults and children, shoes, clothing upkeep
  • Activities and education: books, magazines, newspapers, courses, sports, outings, lotto tickets, cable, television, Internet, vacations
  • Health: medication, pharmacy, hairdresser, dentist, optometrist
  • Miscellaneous: life insurance, child support, daycare, tobacco, alcohol, etc.
  • Special occasions (if your budget permits): Christmas or birthday presents, family outings (e.g.: zoo), etc.

Activities to make your toddler aware of the value of money

3 to 4 years old

  • Teach him to recognize coins and dollars.
  • Teach him to keep money in a safe place such as a piggybank, for example.

5 to 6 years old

  • If your budget permits, let your child manage a small amount of money. Determine how much he will spend and how much he will save, so he starts learning how to make choices.

Loving that counts!

Many couples who strive for fairness share their expenses 50-50. However, since both spouses rarely earn the same salary, this formula is not as fair as it seems. Experts recommend instead that shared expenses be divided in proportion to each spouse’s income, including the purchase of a home. For example, if one spouse earns $20,000 and the other, $40,000, the couple’s total income comes to $60,000. The spouse who earns $40,000 could therefore assume 2/3 of household costs, and the other could pay the remaining 1/3. It’s also recommended to avoid allocating fixed expenses (mortgage or rent, for example) to one spouse, and variable expenses (such as groceries) to the other: the one paying variable expenses will have a harder time staying on budget.

To make it easier to manage bill payments, both spouses can deposit money into a joint account each month for common expenses. It is, however, recommended for each one to have his or her own personal account. This way, they can each have a small amount to spend as they wish. Did you know that a joint account can be garnished, meaning the money in it can be seized, if one of the spouses doesn’t pay his or her debts or, if one dies or becomes incapacitated, that it can be frozen until all legalities have been settled? That’s one more argument for keeping a personal account.

In Quebec, 65% of children are born out of wedlock. Contrary to what many believe, when common-law partners separate, the assets acquired while living together are not divided equally. Each asset is returned to the person who purchased it, unless both names are on the invoice or the division was established in a cohabitation agreement. Also, the children are the only ones entitled to receive support payments in case of separation.