Developing a Personalized Financial Plan: Ontario
THE IMPORTANCE OF CREATING YOUR OWN PERSONAL BUDGET
- A budget contains a list of your planned and actual expenses and your income, which includes all of the money you receive from work, government and investments.
- Income does not include sources of credit.
- Using a budget helps you see exactly how you are spending your money so that there are no surprises.
- A budget benefits you, so it is important to be honest with yourself when you are creating your budget.
HOW DO I CREATE A BUDGET?
Step One: Track Your Monthly Income and Expenses
- Keep all pay stubs, bills and receipts for cash purchases to help you figure out what your monthly income and expenses are.
Step Two: Record Your Monthly Income and Expenses
- List all of your monthly income and expenses.
- Use a budget worksheet to add up your income and expenses for the last month.
- If you have certain expenses that are paid annually, divide the number by 12 to determine your monthly cost.
- Continue tracking your income and expenses in this way every month.
Step Three: Calculate Your Total Money Available
- Subtract your total monthly expenses from your total monthly income to get your Total Money Available per month. Finally, subtract any loan and credit card payments from your Total Money Available per month to see if you have money left over or not.
- If you do not have enough income to pay your expenses, you need to look over your budget and see where you could spend less money.
SAMPLE MONTHLY BUDGET
Salary or benefits (after tax and other deductions) $___________
Government Benefits for Retirement (CPP, OAS, GIS and GAINS) $___________
Income From Registered Investment Products (RDSP, RRSP, RRIF) $___________
Foreign Pensions $___________
Workplace Pension Plan $___________
Worker’s Compensation $___________
Ontario Disability Support Program (ODSP) $___________
Ontario Works (OW) $___________
Ontario Senior Homeowners' Property Tax Grant $___________
GST/HST Credit $___________
Ontario Energy and Property Tax Credit (OEPTC) $___________
Ontario Sales Tax Credit (OSTC) $___________
Self Employment Income $___________
Interest and Investment Income $___________
Other Sources of Income $___________
TOTAL MONTHLY INCOME $___________
Condo Fees $___________
Property Taxes $___________
Cable/Internet/Telephone/Cell Phone $___________
Repairs and Maintenance $___________
Heat/Air Conditioning $___________
Hydro/Hot Water Tank Rental $___________
Gas/Car/Public Transit/Taxi $___________
Insurance (Life, Health, Travel, Home, Disability, Car, etc) $___________
Medications and Other Medical Expenses $___________
Dental Care $___________
Eating Out (Restaurants/Cafes) $___________
Recreation/Entertainment (Movies, Bingo, etc) $___________
Personal Grooming (Hair/Cosmetics, etc) $___________
Bank Fees $___________
Other Expenses $___________
TOTAL MONTHLY EXPENSES = $_______________
TOTAL MONTHLY INCOME $_______________
TOTAL MONTHLY EXPENSES - $_______________
TOTAL MONEY AVAILABLE PER MONTH (Total income minus total expenses) = $_______________
Minus LOAN PAYMENT - $_______________
Minus CREDIT CARD PAYMENT - $_______________
SURPLUS/DEFICIT = $_______________
HOW DO I STAY ON BUDGET?
Be honest and realistic. Spend less than you earn. Make sure you list everything. Set short-term (pay off total credit card balance) and long-term goals (savings).
- Know the difference between needs and wants. If you do not need to purchase something, consider putting the item back on the shelf.
- Comparison shop by buying groceries on sale or at less expensive supermarkets. Comparison shop for services, such as phone providers and insurance.
- Use coupons, and find out which stores give seniors a discount.
- Use credit cards only for emergencies.
- Pay off your total credit card balances before the due date each month to avoid paying interest and other fees.
- Learn to say “no” when kids, relatives, and friends ask for money.
- Save regularly into a no fee savings account.
- Update your budget every month. If circumstances change (e.g., change in income), remember to add the changes to your budget.
HOW CAN I INCREASE MY SAVINGS?
- A standard guideline is to save at least 10% of your pay (e.g., If you make $1,000 a month, try to save $100 from your pay).
- If you have a lot of debt or if you have high interest debt, concentrate on paying off the debt before trying to save.
- If your income changes each month, adjust your savings accordingly.
- Build precautionary and longer-term savings into your monthly budget. Consider putting $10 per week into an account to cover emergencies, unexpected increases in expenses, and declines in income.
- You might look into setting up an automatic savings program with your bank.
- Each year, challenge yourself to reach a higher savings goal.
WHERE CAN I GET MORE INFORMATION?
For a list of Free Toronto Public Health Dental Care Clinics for Seniors (65+) in Toronto, please access the following website: www.toronto.ca/health/dental/seniors.htm
For a list of institutions that offer low cost dental treatment in Toronto, see: www.toronto.ca/health/dental/pdf/ds_low_ cost.pdf