Budgeting Guidelines for After-Tax Income

Develop your budget with the money you have available after gov’t deductions from your pay cheque, but before voluntary deductions such as RRSP, pension and other savings.

If you have expenses such as high debt payments, childcare, school expenses or giving you need to reduce your spending in other areas to accommodate these higher expenses.

This guideline is only a starting point. Based on your income and family circumstances, your allocations may be different.

  • 35% HOUSING – mortgage, taxes, rent, insurance and hydro
  • 5% UTILITIES – phone, cell phone, electricity, cable, internet
  • 10-20% FOOD – groceries, personal care, baby needs
  • 15-20% TRANSPORTATION – bus, taxi, fuel, insurance, maintenance, parking
  • 3-5% CLOTHING – for all members of the family
  • 3% MEDICAL – health care premiums, specialist and over the counter medications
  • 5-10% PERSONAL & DISCRETIONARY – entertainment, recreation, tobacco, alcohol,  eating out, gaming, haircuts & hobbies
  • 5-10% SAVINGS – Plan to save money for expenses that don’t occur every month.    Having a little extra available is a good.
  • 5-15% DEBT PAYMENTS – Many people find that their budget is quite tight because their monthly debt payments are closer   to 25% of their net income.