By Susan Karpman, Director, Community Services and Immigration

As a society, we are conscientious about keeping track of our emails, voicemails, texts, Instagrams and Facebook accounts. But are we that diligent about our budgets?  Just as we wouldn’t want to fall behind in our messages, postings and pics of the day, neither should we about our personal funds.

How often do we examine our bank accounts and wonder where the money went?  Paying close attention to those numbers on a regular basis, keeps us up-to-date and in control of our expenditures.

Think of a budget as a financial GPS.  A spending roadmap. It will navigate our numbers, urge us to ‘recalculate’ when we veer off course and provide us with an ETA for our monetary goals.

1.    Make a habit of reviewing your budget monthly. Daily revision can be tedious. (We’ll see the trees but lose sight of the forest.) Annual revisions can be dangerous. (We’ll see the forest but chances are we’ll have lost track of the trees.)  A month however, is manageable segment of time. It is how we get paid and how we pay our bills. If we, overspend one month, we can pull back the reigns the next.
2.    Create a spreadsheet by listing all your monthly expenses on the left and all income sources on the right. The objective? To balance the two sides. As much as we may not want to know the truth, seeing it in black and white eliminates the guess work and is the first step towards taking control.
3.    If expenses are annual (ie: driver’s license), divide by 12. If semi-annual (ie: property taxes), divide by 6. If bi-monthly (ie: hydro), divide by 2. It’s easy to forget about certain irregular disbursements. Pro-rating them allows us to be planful by setting money aside in anticipation of future invoices.
4.    Keep track of your bills throughout the month. It is insufficient to know you spent $200 in the grocery store. You need to know on what. It’s hard to cut back if you don’t know where.
5.    Since your revenue sources probably do not arrive simultaneously, don’t feel pressured to pay all your bills at the same time. In this way you will avoid overdraft fees and the stress of possible insufficient funds. Make arrangements with your creditors so that you stagger your payments, ensuring that they are in sync with your income. This is referred to as cash flow.
6.    Compare your spread sheet with your bank statements by checking off corresponding transactions. This is good practice. It holds you and the bank accountable for possible errors.
7.    If you share your life, make your partner part of the process. It’s  hard to balance the budget if two people in the same household are working at cross-purposes.
8.    Don’t be afraid to seek out an objective evaluation if your budget is of concern. Sometimes a new perspective can make all the difference in the way you manage your money today and plan for your future tomorrow.

This article is part of a special series by Ometz for Financial Literacy Month. Ometz runs “Money Matters”, a financial capacity-building program. This project was made possible through financial support from the Education and Good Governance Fund of the Autorité des marchés financiers. Information, opinions and statements made are solely the responsibility of Ometz.