Do you know where your money is going?

Woman creating a budget

Do you find you’ve run out of money at the end of the month and are not sure where it has gone? You’re not alone: it’s common for people to spend money without tracking it and find themselves in the red by the end of the month, says Janette Lantz, Personal Banking Advisor at Cambrian. However, with a little work, this can be reversed and you may find you have extra money to put towards debt repayment or your savings.

Discover What You’re Spending On

“The first step is to find out exactly what you’re spending your money on,” Lantz says. Go through three months of your bank statements and credit card statements. As you do this, categorize your expenses using a system that makes sense to you. Here are some categories you may wish to use:

  • Housing
  • Transportation (include maintenance, car payments, and insurance payments in this category)
  • Debt payments
  • Phone/Internet
  • Groceries
  • Clothing
  • Entertainment
  • Savings
  • Eating out and takeout
  • Takeout coffee


When creating your budget, take note of whether an expense is fixed or non-fixed. Fixed expenses are the same every month and include things like a gym membership, phone bill, mortgage payment, and RRSP contributions. Non-fixed expenses include groceries, eating out, clothing, and entertainment.

Once you’ve categorized three months of your expenses, add each category up and divide by three. “This will give you an average of what you are spending in each every per month,” says Lantz. Now it’s time to look at each category and discover where you are over-spending, and put yourself on a budget. Give yourself a certain amount of money every month for each category in your budget, and put yourself on a “cash diet”. Separate the amount budgeted for fixed expenses and non-fixed expenses by putting the funds into different accounts. Do not touch your fixed expenses account, and spend only from your cash account. 

One common area of over-spending is on eating out and takeout. Many people have no idea how much they’re spending. Combat this by setting a budget for dining out every month, and once you’re out of money, you will have to wait until next month before eating out or ordering takeout. This will help you change your habits, because you are going to want your dining out budget to last through the month.

By following this strategy, you’ll understand what you’re spending on every month, making it easier to find money to put towards your savings or paying down debt.