Posted on October 10, 2019 in Calculators & Tools Sharon's Corner

personal-budget-01.jpgNow that you have learned about your cash inflows and outflows, here is an example of creating a personal budget. 

Let’s say you are married and have two teenagers. You and your spouse both work full-time, earning $65,000 each per year, and your kids play house sports. 

Cash Inflows is $8,000/month, after-tax. ($2,000 x 2 pay periods x 2 working parents)


Mortgage $2,700
Hydro $200
Gas $200
Property Tax $425 ($5,100/year)
Water & Sewer   $100 ($1,200/year)
House insurance   $200 ($2,400/year)
Internet   $80
Cell Phone   $400 (4 phones for the whole family)
Vehicle Payment $500 (two vehicles but one is owned outright)
Vehicle Insurance $400
Vehicle Gas $400 (thankfully neither of you commute far)
Groceries $1,000
Life insurance $125
Total Required Cash Outflows $6,730




Kids sports & activities $100 (new gear is needed annually for growing teens)
Clothing $400
Gym membership $80
RESP   $100
Vehicle/House Repairs $150
Meals & entertainment $300 (Starbucks is a habit for the whole family)
Vacation $300
Total Cash Discretionary Outflows $1,530

personal-budget-04.jpgWhen you subtract the cash discretionary expenses from the net required cashflow, you are left with a ($260). This means you are either using a credit card or a line of credit every month just to stay afloat. This negative amount will also continually increase month-to-month as you will have interest to include in your budget. Therefore, if you want to live within your means, you either need to have additional sources of income and/or reduce where you spend or save. Or maybe it’s time for your teens to get part-time jobs and pay for their own cell phone and/or clothes. 

In our example, you have decided to spend less at Starbucks by $50. Vacation savings will also be reduced by $100 because you decide to stay-cation every second year, but the trip away now has more to spend. And you received some great news, the government decides you get Child Tax Benefits of $120/month, so you are now in the black with $10 left-over which can be added to your emergency fund or another Starbucks coffee.

Now try creating your personal and/or business budget and let us know how it works out for you. 

Check out our next blog which has some tips for managing your cash inflows and outflows.  

***This blog is for information only and not to be used as tax advice or planning without first seeking professional advice. Information is subject to change without notice.