Get a free, no obligation personal loan quote with rates as low as 6.99%
Get Started You can apply with no effect to your credit score

Living paycheque to paycheque or feeling like you constantly have no money to do anything but eat and pay your rent is a pretty good indicator that you need to re-evaluate your current financial situation. Taking control of your finances is one of the best decisions you can make for yourself, you’ll benefit from having a solid financial life in more ways than you think of. When it comes to regaining control of your finances the most important thing you can do is be honest with yourself about how much income you have coming vs. how much you spend. After this created a functional budget and sticking to it will be much easier for you.

Here are the 5 easy steps you should take if you’re looking to take back control of your finances:

  1. Assess Your Income

You need to know exactly how much you bring in (after taxes) each month. This number is what you’ll build your entire budget on. Your monthly paycheques are probably your main source of income but don’t forget to include any other secondary income: a second job, alimony or miscellaneous cash you make from doing side job or helping out friends or family members. Make a list, add it all up and that’s your monthly income.

  1. Determine Your Expenses

Figuring out your expense and coming face to face with how much money you spend in a month is typically the most difficult part of creating a budget for most people. No one likes to see the exact numbers, especially if you already know they’re not great. To figure out how much money is going out, you should make the following lists:

Fixed Expenses

  • Housing costs (rent, mortgage payments, condo fees)
  • Car payments or public transportation costs
  • Insurance
  • Utilities
  • Cable, satellite, internet

Variable Expenses

  • Food
  • Gas
  • Property tax

Miscellaneous Expenses

  • Car maintenance
  • Gifts
  • Entertainment

Now that you’ve made your lists and written down all your monthly expenses you need to add them up and then subtract that number from your monthly income. This will tell you whether or not you’re spending more than you bring in and will also show you where you either need to cut back or can afford to cut back.

  1. Trim the Fat

Now that you know exactly where all your money is going you can start to trim away the excess spending and figure out where you can afford to cut back. Some cut backs may be more obvious than others; if you’re currently buying an expensive coffee on your way to work every day of the week then you can probably count that as an unnecessary expense.

The best way to determine where you should cut back is by figuring out what monthly expenses are actual ‘needs’ and what expenses are just ‘wants’. Be as honest as possible with yourself, you might want to believe that your weekly dinner out with your friends is a ‘need’, but in reality it’s the social time that’s a ‘need’ while the expensive dinner is a ‘want’.

  1. Pay Yourself

Treat yourself as your own employee and make sure you pay yourself before you start spending on unnecessary things. Every paycheque, pay yourself enough to cover all your monthly expenses and then pay your savings account. After you’ve done that the money you have left over is yours to do with as you please.

How much you pay yourself every month is completely up to you and your bills. If your trying to pay down some debt you’ll probably only be able to save a small amount but that’s ok, saving $10 a week is better than nothing. Plus having a small financial cushion to deal with emergencies or unexpected expenses is one of the most important financial decisions you can make.

  1. Keep with it

While coming to terms with how many unnecessary expenses you have every month is not exactly the most fun thing you can do, keeping up with the budget you’ve created will probably be even less fun and potentially very difficult at times. The only person that you can be accountable to is you. You need to keep yourself in check and follow the spending guidelines you’ve created; the end reward of finally getting your finances back on track will be well worth your effort.

If you ever find yourself having trouble sticking with your budget set yourself a few small goals, taking control of your finances is a great goal but it might seem a little too general for you. Here are a few goals you might want to set for yourself to reignite your drive.

  • Save enough to live without an income for 3 months
  • Put aside enough for a weekend trip away with friends
  • Pay off your credit cards completely (click here for tips)
  • Go one week without charging anything to your credit card

Don’t be too Hard on Yourself

One final and extra step you can and should take is to not be too hard on yourself. Yes we all want to have financial freedom and achieve the goals we set out for yourself but getting down on yourself for every little slip up will only work against your greater plan.

Caitlin Wood avatar on Loans Canada
Caitlin Wood

Caitlin Wood is the Editor-in-Chief at Loans Canada and specializes in personal finance. She is a graduate of Dawson College and Concordia University and has been working in the personal finance industry for over eight years. Caitlin has covered various subjects such as debt, credit, and loans. Her work has been published on Zoocasa, GoDaddy, and deBanked. She believes that education and knowledge are the two most important factors in the creation of healthy financial habits. She also believes that openly discussing money and credit, and the responsibilities that come with them can lead to better decisions and a greater sense of financial security.

More From This Author

Special Offers

More From Our Experts
Loans Canada places No. 228 on The Globe and Mail’s fifth-annual ranking of Canada’s Top Growing Companies.

By Caitlin Wood
Published on September 29, 2023

Loans Canada is excited to announce it has made it onto the Globe and Mail’s Top Growing Companies list for the second year in a row.
Finder Awards Finalists: Personal Loans Customer Satisfaction Awards 2023

By Priyanka Correia

Loans Canada is happy to announce it received the finalist award in the Best Personal Loan Search Platform category.
Beware of Fraudulent Lenders Impersonating Loans Canada

By Caitlin Wood

A note to our clients about fraudulent lending practices and illegal upfront fees.
Debt Consolidation Loan Rejection: Reasons and What Can You Do?

By Bryan Daly

You applied for a debt consolidation loan to finally start tackling your debt but then you got denied. Now what?
Statute of Limitations In Ontario For Debt

By Lisa Rennie

Everything you need and want to know about the statute of limitations in Ontario for debt.
Quebec’s Bill 31: Are Tenant Rights At Risk?

By Maidina Kadeer

Quebec's Bill 31 is an amendment to rental provisions. The bill includes the controversial cancellation of lease transfers.
How To Manage Debt: Credit Cards, Mortgages, And Beyond

By Lisa Rennie

From mortgage debt to consumer debt we have the top tips you need to learn how to manage debt responsibly and effectively.
Canadian Debt Collection Laws: How To Stop Collection Harassment

By Lisa Rennie

Are you currently being harassed by a debt collection company? Learn about the Canadian debt collection laws.

Recognized As One Of Canada's Top Growing Companies

Loans Canada, the country's original loan comparison platform, is proud to be recognized as one of Canada's fastest growing companies by The Globe and Mail!

Read More

Why choose Loans Canada?

Apply Once &
Get Multiple Offers
Save Time
And Money
Get Your Free
Credit Score
Expert Tips
And Advice

Build Credit For Just $10/Month

With KOHO's prepaid card you can build a better credit score for just $10/month.

Koho Prepaid Credit Card