As Canadians’ savings remain adrift in the economic doldrums, now might be a good time to revisit the B-word: Budget.

“Budgeting used to be a four-letter word,” says Julie Jaggernath, director of education at the Credit Counselling Society of Canada. “We encourage that word to be ‘plan,’ but lots of people had other four-letter words for it. It’s water-cooler talk again, so that’s an encouraging sign.”

When creating a budget, the most important step is to set a goal that’s realistic. “Think about a budget like a diet,” says Laurie Campbell, executive director of Credit Canada. “You know how you always get people, especially at the beginning of January, saying, ‘Oh, I’m going to lose 100 pounds within the next year?’ It’s not realistic. And because it’s not realistic, they get turned off, and stop dieting or throw away their goal.”

Next, says Jaggernath, make a list of your monthly earnings and expenses. “What are you bringing in, what do you need to buy?” she says. “One thing we often tell clients is you can have a lot of things that you want, (but) you can’t have everything you want.”

Include yearly expenses, “things like your Costco membership, your kid’s dance lessons, haircuts, holiday spending,” which Jaggernath says many Canadians tend to forget.

Give yourself some flexibility in your budget, says Campbell. “Let’s say you buy your lunch every day at work,” she says, “and you look at your budget and think, ‘I can’t afford to spend $7 a day at work.’”

Campbell’s suggestion: Bring your lunch three days a week and eat out twice. “If you have to bring your lunch five days a week when you’re used to eating out every day, chances are after two weeks you’re going to (say), ‘Screw this, I hate it,’” she says.

Remember to set aside some extra money while paying down debt, says Jaggernath. Otherwise, hard work can fly out the window during an emergency, “whether it’s a wedding or the roof goes,” she says.

Finally, don’t discount the role of good old-fashioned common sense. “Don’t go grocery shopping on an empty stomach,” says Jaggernath. “Separate business and personal finances if you’re running a business. And recognize how far-reaching financial difficulty can be.”

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