Budgeting: The Life Changing Habit

Budgeting has had a massive impact on my life and is what gave me confidence to pursue photography as a full-time career. It gives me peace of mind to understand where my money is going each month and lets me assess what purchases are meaningful, and which are useless.

My budget keeps me disciplined and holds me accountable for my purchase decisions.

At 18 I moved out on my own to attend college. Only having a finite surplus of money to sustain me for the next 18 months, I knew I needed a plan. I divided my money by 18 and saw how much I could afford to spend each month. I meticulously went through every transaction I made and recorded it in the correct column of my Excel spreadsheet.

Sound boring? It was.

But, with a little discipline, I was able to stick to it most of the time and I didn’t go hungry. This form of budgeting is not enjoyable and quite time consuming. But, there’s a much better solution.


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Enter, Mint.com. This budgeting app took my boring Excel spreadsheets and made budgeting automated and seamless in my life. I connect my debit and credit card* and it automatically inputs all my transactions. If I go over budget on groceries, it’ll notify me. There’s a saying in business: “You can’t manage what you don’t measure.” Mint helps me manage my finances in real time.

*You can also use Mint without connecting your cards if you’re more comfortable with that

Budgeting has the added benefit of exposing certain “leaks” in your finances. Sure, your Starbucks coffee is only $2.25 every morning, but Mint puts this into perspective of $45 a month ($540 a year). This can be done with going out for lunch every day, Uber trips, or all of your subscriptions (Spotify, Netflix, Crave, Amazon Prime, Cellphone Bill, etc.). It clearly shows where you’re spending the most money, which you can then decide whether each item is important to you.

Mint is online and has smartphone and tablet apps too that all sync together. There are plenty of other budget apps that are great too but Mint is my favourite.

Be a Mindful Consumer

I’m not advocating you remove things you love from your spending habits, just find leaks that you don’t really care about and cut them out. I personally set a limit of $15 a month on coffee shops and instead make my coffee at home with my French Press as I prefer the flavour and enjoy the morning ritual. I buy “expensive”, Kicking Horse Coffee, use my French press, and I spend an average of $12 a month on a bag of coffee. I now have an extra $33 a month to put into a savings account to pay back student loans.

I understand which purchases I really care about, and which ones are more compulsive. I have learned to say no to certain things to help my financial future.

This is an ongoing practice, and it’s okay to slip up, we’re all human. The fact that you made the initial decision to start budgeting is a step in the right direction. Some months I go over budget, and that’s okay.

Make a List

To create a budget, it’s helpful to categorize all purchases into three separate columns: Needs, Luxuries, and Junk.

Needs: are essential items you can’t live without: rent, groceries, utilities

Luxuries: purchases that greatly benefit your life, but you could live without them if times got tough: restaurants, alcohol, entertainment.

Junk: things that add no value to your life and you typically buy them with zero thought.

Everyone has their own interpretation of what purchase fits in each category - there are no wrong answers for your own personal budget. Needs are essential so keep spending the same on them, Luxuries can be analyzed further to see whether you really need them in your life, and Junk are items that you need to stop buying right now.

Be a conspicuous consumer, if an item doesn’t bring value to your life, don’t give it your hard earned money.

Turn it into a Game

Challenges are a great motivator to stick to something until it becomes a habit. I like to make financial challenges for myself. For example, I’ll see how little I can spend on groceries in a month and still eat well, or make a goal to save $200 this month by cutting some of the leaks out just for a month.

You could team up with a friend or your significant other to see which one of you can spend less in a week or see who makes the fewest transactions.

When I graduated college, I made a rule that for every $1,000 I paid toward my OSAP debt, I could spend the next $100 I earned on something fun. This motivated me to save money and allowed me to spend a smaller amount guilt free. Before I knew it, my debt was gone.

Lifestyle Creep

As you start making more money in the workforce, you should be very weary of lifestyle creep. This is the concept of your budget increasing in relation to your salary increases. For example, when you get your first post-university job, it’s tempting to justify a huge purchase like a brand new car or one bedroom apartment downtown Toronto. Don’t. Instead, treat that additional income as though it doesn’t exist and automatically put that money into a savings account, or better yet a TFSA at WealthSimple.

Most people will get a promotion and reward themselves with a large purchase. New car, bigger apartment, fancy watch. Don’t. Then they start spending more on items they couldn’t afford before. Shopping at Whole Foods over No Frills, getting a luxury car lease, going on that $6,000 Hawaii vacation because “you deserve it”. This is the epitome of lifestyle creep and it is how most people live their lives: credit card debt, car payments, living paycheque to paycheque. Learn to budget and really consider which purchases and items bring value to your life. You’ll be much happier, financially free, and probably reach early retirement before any of your colleagues.

Make Goals

The last thing to note is budgeting is much more enjoyable when there is a goal in mind. For me currently, it’s paying off my $35,000 OSAP loans 1 year after graduation. It might be 20% downpayment for a home, or $2,000 for a trip abroad next year, et cetera.

Whatever your saving goal is, write it down and keep it visible to have a consistent motivator to stay disciplined. Put it on your fridge and see it every morning to push you to be better with your money.


In conclusion, budgeting is whatever you want it to be. It can help you reach early retirement at age 40, or simply document what you’re spending your money on each month. Money certainly doesn’t buy happiness, but it does remove a lot of unnecessary anxiety.

Jer Harman