How We Designed Our Budget Step 1-Gathering The Information

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In step 1 of the CBB 10 Step mini-series, you’ll learn how we designed our budget by gathering information.

When we said enough is enough with our finances, that’s when we started to design our budget.

We didn’t realize that there is more to setting up a budget other than needing numbers.

Let me show you how we created what is known today as the Canadian Budget Binder Budget.

Taking The First Steps To Create Your Personal Budget

You’ve made it this far, so you must be curious how we went about designing the monthly budget that took us from debt to debt freedom.

Don’t yawn; it indeed can be a fun experience, especially when you see your savings grow and your debt vanish.

In creating our 10-step monthly budgeting series, we aimed to keep it brief and straightforward so as not to overwhelm first-time budgeting folks.

We’ve poured a little bit of our experience into every series post from 1 to 10, and we hope that you too can benefit from the perks a budget offers your mind, body and soul, not to mention your bank account.

Organizing Your Budget Information

This part of the budget will be busy because you have to locate all of your financial information.

You know, all those bills you have in a shoebox or the “junk drawer,” it’s time to fish out those paper critters and get organizing.

Some of the steps we took to get organized in preparing our first monthly budget are relatively simple.

The best part is the more you do it, the better you get at keeping papers under control, so you know where everything is at all times.

Think- Everything has a place.

Related: The KonMari Method of Organization

Gathering Your Budgeting Information

When we created our budget, we had a Hilroy lined notebook that we made notes in that we could return to if needed.

If this is your first time budgeting, I would suggest that you do the same, especially if you have any questions for me.

  • Locating all bills including credit cards! Anyone you owe money to including the mortgage/rent.
  • Organizing bills into piles by date ie: Rogers, Union Gas, Hydro, Reliance or finding data from logging into the respective websites
  • Make a list of dates and cost of each bill in an excel document
  • Make a list of dates bills typically need to be paid by but this may vary.
  • Make note of interest rates if you are not paying bills off in full. If you don’t know get on the blower and find out!
  • Make note of the cost of each bill whether it was variable or fixed

It was imperative to ensure we had all the information at our fingertips to design a budget for our needs accurately.

It’s important to remember that every nickel counts, so you don’t want to forget anything even if you think it’s not very important.

If there is a particular bill you cannot locate, call the company and ask for assistance or if you have online access, that may be a time-saver for you. We have automated all of our bills now and can view all accounts online, keeping a cinch organized.

Related: Debt Repayment Plan – Free Printable

Create a List of Bill Payments

Once you’ve finished gathering your financial information, it’s time to put it to work.

We then made a list of everything we knew we would have to pay for each year, for example,

  • Dog licence
  • Stickers for vehicles
  • Krown application on vehicle
  • Tax prep
  • Christmas
  • Dentist

I think you catch my drift. If you know you are going to pay for it, save for it in advance.

You will learn more about that in the projected expenses part of this budgeting series.

I know you can’t possibly think of everything, so keeping a miscellaneous section in your budget is vital.

Once you have all your debts, variables, i.e. grocery, miscellaneous, pet, transportation and fixed expenses, i.e., mortgage, taxes, insurance etc., you can start to put your budget together.

Related: How many budget categories should I have?

Understand Net Income And Gross Income

Another essential point to remember is to use your net Income, not your gross Income

Some people believe your gross Income is big bucks, but it’s your net Income that puts a roof over your head and food on the table.

Once the government takes their share of your cheque, you’ll see how it shrinks.

Net Income = What you take home at the end of the day after deductions. (government taxes, expenses etc.)  Essentially it is the amount deposited into your bank account from your employer.

(Note: If you are self-employed, you need to know what your net and gross figures are)

Gathering Information From Various Income Sources

If you have any other income sources, these figures are also essential to factor in.

However, if the income sources are variable, I don’t count them as fixed Income since the amount can fluctuate.

It’s not something I would design my budget around. Not all variable income sources are stable.

Simplified means you don’t know how much net Income you will get from various revenues or how often.

It’s nice to have extra cash at the end of the month to add to your savings, but you can count them in if you know the Income is consistent but variable.

If you have to design your budget around a variable income, try to collect six months of Income and do an avg income to base it on.

By doing so, it allows you to see

Related: How to budget with irregular Income

Document Everything To Do With Your Money

I know gathering all of the information is tedious, but it will pay off in the end.

Wait until you read about the importance of keeping and gathering your receipts in Step 3.

You have done plenty of work today and rest assured, I’ve made this a simple process.

Take a deep breath and know that these ten steps will make an impact on your financial future.

Your current Income and savings are just as important as your future retirement savings.

Your next step in the Budgeting series > Step 2 Designing Our Budget

Discussion Question: What were the first steps in designing your budget?

Comment below and let me know, or if you have suggestions, I’m up for it.


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