How to Structure Your Monthly Living Costs

Posted on Monday 21 October 2019


Learning how to manage your finances is something that everyone struggles with as a standard part of Adulting 101—and even “being an adult” doesn’t really mean that you are an expert budgeter. Your personal finances are subject to a wide range of fluctuation throughout your life, as you move from one job to the next; change apartments; purchase a home; build a family; start travelling, and so on.

Maybe you want to prepare for the unexpected (say, a leak in your roof or a blown tire on your car); pay for a trip; reduce your debt (from student loans or credit cards), or just to get better at building your savings account.

No matter what your goal is, learning how to structure your monthly living costs will go a long way in helping you get a handle on your financial well-being. And the good news is that smart financial management doesn’t have to be exhausting. All you need are the right tools and the motivation to start, and you can easily start budgeting today!

In the sections below, we’ll take a close look at a tried-and-true method of structuring your monthly living costs—and some expert tips for success—to help you develop a budget that will put your financial anxieties at ease.

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Structure Your Monthly Living Costs with the 50/20/30 Rule

One popular method of organizing your monthly living costs is by using the 50/20/30 rule . It’s a simple way to take a holistic view of your income and get a handle on your expenses. Not surprisingly, it’s one of the most popular budgeting methods out there.

With the 50/20/30 rule, your monthly paycheque is consistently split into three categories and percentages:



  • Necessities


Put 50 percent of your paycheque towards necessities. These are non-negotiables, like rent or mortgage and groceries (no way of getting around it, you need these things to survive).
  • Savings and debt Next, put 20 percent of your paycheque towards your financial health, factoring in both savings and debt together. You can split it in half if you want, and put 10 percent into paying credit cards and student loans, and then put 10 percent into your savings account (these are also non-negotiables, make sure you make your credit card payments to avoid hefty interest rates!).
  • Wants Finally, 30 percent of your paycheque goes towards the things that you want. This is the fun part of your monthly budget, covering things like going out to the movies, splurging on a new purse, or eating out at a new restaurant. (You don’t need them to survive, but they sure make life more fun.) If you don’t end up using these funds, put them towards your savings!


By sectioning off your paycheques into 50/20/30 percent segments, you’ll be able to get a clear look at how you are spending your money and where you can improve. This rule also helps steer you in the right direction, ensuring that your spending—and saving—is both purposeful and designed to set your budget up for success.

Pro Tip #1: Cut Back On Necessities

You can’t stop spending money altogether (and who wants to live in a world like that), but you can definitely minimize the amount of money going out of your account each month. Here are some great ways to start cutting down on the things you need, and the ones that you don’t.

While you can’t cut out the essentials like housing, transportation, and food, you can definitely minimize the amount that you spend on them. Here are some great ways to start cutting down on the things you need:

  • Limit going to restaurants. With drinks, appetizers, and the tip (assuming your server wasn’t a horrible person), dining out can easily be a big food expense. And with 54 percent of Canadians eating at restaurants at least once a week, there are plenty of opportunities to cut back. Plus, you get the extra incentive to make your future restaurant choice a really good one (see you later, fast food dollar menu).
  • Prep your meals before dinnertime. Be more thoughtful when it comes to buying groceries, and prepping ahead of time decreases the chance that you’ll make the easier choice of ordering takeout —no matter how tempting it is to order from that Chinese restaurant with the amazing egg rolls.
  • Buy generic brands. Just because there isn’t a big-name label attached to a product, that doesn’t mean that it isn’t the same thing. Literally. Save a few bucks here and there by opting for the generic version of baking products, canned veggies, cleaning and paper products, and yes—even water. You can even opt for online stores like Brandless that carry a huge assortment of unbranded goods for a fraction of the price.
  • Minimize your transportation costs. If you have a car, you could shop around for a new insurance rate, start using a gas rewards card, or even trade in for a more efficient vehicle. Walk or bike as much as you can to minimize expenses and get some exercise in (and here’s a plus: you might even be able to cut back on your gym membership costs, too).
  • Be mindful with your utilities . When it comes to air conditioning and heating, a few degrees can make a big difference. Keep your windows open in the summer for a nice cool breeze at nighttime, instead of running the air conditioner all day. Set your thermostat a few degrees lower in the winter, and bundle up with sweatshirts and blankets (add a couch and a good movie, and you’ve got a winter escape heaven).


Ultimately, the goal here is to get creative and to challenge yourself on taking a closer look at the way you spend your money. Not all of us are wired for smart spending, but it’s a skill that you can learn over time. And of course, don’t forget that any improvement is going to make a difference over time, no matter how small!

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Pro Tip #2: Maximize Your Budget

Getting a handle on your monthly living costs can be a real challenge, especially if you are living from one paycheque to the next (and who isn’t these days). Luckily, there are tons of ways to have your budget right at your fingertips, making it easy to keep responsible spending and saving top of mind. Online budgeting tools, like Mint can go a long way in helping you stay on top of your finances.

Budgeting apps like these can make it easier to see exactly where your money is going each month, with categories for Transportation, Grocery, Entertainment, and more. You can also set up automatic alerts to let you know when you are spending over your set limit for any category.

Online budgeting tools are everywhere, so there are plenty of options to choose from and find the app that fits your needs.

Pro Tip #3: Make Saving as Easy as Possible

No matter how you look at it, saving is tough. The average Canadian household has less than $900 saved, leaving barely enough room to cover emergency expenses such as car and home repairs.

Whether it’s through your bank or an investment company, sometimes the best way to save is to make it as easy and automated as possible. Make your savings into an automated process so that you don’t even have to think about it. Set your transfers to put aside a little bit of money each week, and you’ll be able to save without even giving it another thought. For example, you can link your checking and savings account for automatic transfers to send $1 into savings every time you swipe your card, or monthly transfers of $25.   The goal is to gradually get your savings up to where you can comfortably cover emergency, one-time expenses, like a broken dishwasher or a phone that accidentally got dropped in the toilet (hey, we’ve all been there).   With a little bit of extra focus and some determination, you can use the 50/20/30 rule as a foundation to organize your finances and get back on track. Of course, starting out with a budget for your first time can be stressful—and My Canada Payday is there to help you bridge the gap from one paycheque to the next. Be sure to check out the FAQ page to see the loan process.   If you need a little bit of help to consolidate your debt, pay off an overdue bill, or just to get a little bit of breathing room, a payday loan can be a great tool to help you start learning how to manage your budget. Give us a call (604-630-4783) or send us an email ( getpaid@mycanadapayday.com ) at any time to find out more about what makes My Canada Payday one of the top payday lenders in Canada!