How to Budget Successfully in Canada
Living in high-cost cities like Toronto or Vancouver requires disciplined spending. A monthly budget is the best tool to stop living paycheque to paycheque.
[Image of 50 30 20 budget rule chart]The 50/30/20 Rule Explained
This simple rule suggests splitting your after-tax income into three buckets:
- 50% Needs: Rent, groceries, utilities, minimum debt payments. These are bills you must pay to survive.
- 30% Wants: Dining out, Netflix, hobbies, new clothes. These make life enjoyable but can be cut if needed.
- 20% Savings: RRSP contributions, emergency fund, and extra debt payments. This is your "Future Self" fund.
Tips for Cutting Costs
Groceries: The average Canadian family spends $1,000+ on food. Meal planning and shopping at discount stores (No Frills, FreshCo) can save 20%.
Subscriptions: Audit your bank statement. Cancel streaming services or gym memberships you haven't used in 3 months.