It’s time for a spring budget review!

Springtime is the season of new beginnings, warmer weather, and longer days. Unfortunately, it’s also the time of spring cleaning, and that includes cleaning up your finances! Most of us could benefit from an annual spring budget review. Here are some tips to help you get started on this personal finance project. 

Examine your income 

Your budget ultimately depends on your income. The money you have coming in will heavily influence the money you can comfortably spend. Many of us know our salary or hourly pay rate, but we don’t pay super close attention to the exact figures on our pay cheques. Take a moment to look back at your previous bank deposits and examine your monthly income. This will give you a foundation for your budget. 

Analyzing your income is especially important if it has changed recently. Maybe you have been promoted at work, secured a new position, or experienced a loss in income. Whatever the case, your incoming money may be different from the last time you made your budget. Make sure you stay up to date with your finances during your spring budget review.

Track your spending 

The way we spend our money can say a lot about our budgets. Some of us are heavy spenders who love to shop, while others are more frugal and conservative with their money. Your bank history can tell you about your habits, what you spend money on, and how much you tend to spend. For better or for worse, our bank statements don’t lie, and they can sometimes surprise us when we realize how much money we shell out. As part of your spring budget review, you can think about if there are any areas where you can cut back on spending. Often, we don’t even realize how much we are spending on various items. It’s important to be honest with yourself during this process!

Do you have any new expenses?

As we move through life, we gather new fixed expenses. Some of these are planned, while others are not. For example, mortgage payments are an expense people prepare for for years. On the other hand, a person might not plan for a pet to become ill and require medication for life. Since you last reviewed your budget, can you think of any new expenses that will have a major impact on your finances? Similarly, are there any future costs you know will affect you, such as a new car or student loans? It’s important to know how these expenses can fit into your budget when you are reviewing your finances. 

What are your financial goals?

Most of us have financial goals, and your spring budget review is a perfect time to check in on them. While everyone has different goals, the one thing they have in common is they depend on our finances and budgeting. For example, your goal may be to buy a house in five years. You will certainly need to take this into account when you are determining your personal budget, so you can save appropriately. Take some time to think about what you want to do with your money. This might involve a big purchase, pursuing higher education, investments, and more. Once you have clear goals established, you can create a budget that reflects how you will reach them. It’s much more effective to have a real plan for the future, rather than tossing money here and there and hoping it will eventually give you what you need. 

Check in regularly 

Finally, one of the most essential parts of budgeting is to check in regularly with your finances. Going forward, try to look at your bank statements, income, and expenses at the end of every month. Is your spending in line with your income, your budget, and your overall goals? It often takes some trial and error to get your budget right, so don’t beat yourself up if you have trouble or need to make some improvements. The important thing is to know and understand your financial situation, which can take time. 

Conducting a spring budget review is not the most fun activity you will do this season. However, it is beneficial for everyone, no matter what their finances look like. If entering the housing market is on your list of goals for this spring, you can reach out to a mortgage broker to start working on your plan. 

If you have any questions about your mortgage, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.