Managing your finances

Make confident credit decisions that are right for you today, tomorrow - or as your needs change. Here is a simple step-by-step approach that can help you manage your finances.

Step 1 - Establishing your goals
Step 2 - Compile your information
Step 3 - Organize your finances
Step 4 - Create a plan of action
Step 5 - Set your budget
Step 6 - Track your budget

Step 1 - Establishing your goals
Take a moment to set some financial goals. Buying a home, a new car, a future vacation, paying off a loan or saving for retirement may be some of the goals on your list. Try to establish both short-term and long-term goals.

Step 2 - Compile your information
Gather all of your income and expense records. Start by finding:

• Your past pay cheque stubs
• Credit card statements
• Rent cheques
• Past utility bills such as phone, heating or cable
• Grocery receipts
• Financial statements such as your mortgage, line of credit and bank account
• Other financial records such as, loan payments, insurance payments and any other sources of income or expenses

Step 3 - Organize your finances

1. Now that you have all of your financial information, figure out how much income you are receiving and how many expenses you are paying out each month.
2. Make sure you include your "after tax" net income on your pay stub, rather than your pre-tax income. At this point you may have to estimate some expenses, such as entertainment, but as you continue to budget, your estimates should become more accurate.
3. To determine your financial position, subtract your total monthly expenses from your total monthly income.
4. When estimating future expenses, it's better to take a high estimate rather than a low one.

Step 4 - Create a plan of action
If you have ended up with a positive amount, you are well on your way to building a strong financial future. You may want to take this extra income and use it to pay off debt and/or perhaps save it to help achieve some of the goals you set in Step 1.

If you have ended up with a negative amount, then you may be spending more than you're earning and you may be using credit to pay the difference. You need to examine each of your expenses and make some budget decisions to get your spending on the right track. Try reducing your least important expenses such as monthly entertainment, or cut back on eating out. It's important to act quickly to avoid potential credit problems.

Step 5 - Set your budget
One of the best ways to establish a strong financial position is by setting a budget. A budget not only organizes your spending, it also helps you plan for and prioritize your expenses - so you can achieve your future financial goals.

Step 6 - Track your budget
Now that you have completed your first budget calculation, try keeping a monthly record of your spending habits. Keeping track of all your monthly expenditures will help you discover what expenses you can reduce and by how much. Even if you have a positive cash flow, you may be surprised how much you spend on things you don't really need. Tracking your expenses will also help you make budget adjustments and achieve your future financial goals more easily.

† Transactions must first be posted to your account before they can trigger a spend alert. It may then take up to 24 hours after a triggering transaction is posted for an alert to be sent.