Cash flow got you in a cash-crunch? Maybe it’s time to start thinking about — and sticking to — a budget.

 

Kira Vermond, money columnist at Chatelaine magazine and author of the book Earn, Spend, Save, says credit cards and easy loans have created an impulse-buy system where it’s too easy to go off the rails budget-wise because you don’t feel like you have to save for big things.

 

“The one thing we’ve forgotten to do as a society is how to save for big-ticket items. We really have to take a page from our grandparents — they knew how to save for things. You have to set goals and work towards them,” she said.

 

Vermond says the key to keeping a budget healthy is to always set away money, even in small amounts, for expensive things like trips while also setting money aside for crucial things like utilities and living costs. Before buying anything you might regret, Vermond recommends first visualizing its inevitable closet-stuffing fate.


“I like to picture things collecting dust in my house. There’s so much stuff that we buy that we don’t actually use much, and all of it will end up in a landfill eventually anyway,” Vermond said.


Glenn Lightfoot, a financial planning consultant with RBC, suggests thinking of your spending as going into different buckets, then tracking how much gets thrown into each bucket regularly.


“Separate your spending into ‘Need to Have,’ ‘Nice to Have,’ and ‘Long-Term Goals.’ You need to understand where your money is going,” Lightfoot said.


Learning how to deny yourself things, no matter how small, is a crucial skill, and Lightfoot suggests you approach your budget from a business perspective.


“It’s the little things that add up during the week —the coffees, the lunches — that kill people. If you run your family budget the way a business runs its budget, you’ll be able to think more ruthlessly,” Lightfoot said.