Create a Budget
Your budget is the foundation of financial success. Learn the right approach for your situation—whether you're crushing debt or building wealth.
Which Budget Strategy is Right for You?
Your financial situation determines your budgeting approach. Pick the strategy that matches where you are right now.
Bare Bones Budget
For people in debt who need to get out FAST
80-20 Budget
For people who are debt-free and building wealth
🔥 Bare Bones Budget (Debt-Crushing Mode)
If you're in debt, this is your path to freedom. Cover only the essentials, then throw every extra dollar aggressively at your debt. It's intense, it's temporary, and it works.
What is a Bare Bones Budget?
A bare bones budget covers only the essentials: food, shelter, utilities, transportation, and minimum debt payments. Everything else gets cut or minimized.
The goal? Free up as much cash as possible to aggressively pay down debt. This isn't forever—it's a short-term sprint to financial freedom.
Housing (Rent/Mortgage + Utilities)
Pay what you owe. If housing is too expensive, consider downsizing or getting a roommate temporarily.
Food (Groceries Only, No Dining Out)
Meal prep, buy generic brands, cut restaurants completely. Aim for $200-$300/month per person.
Transportation (Gas, Car Payment, Insurance)
Essential for work. If you can carpool, bike, or take transit, do it. Sell the expensive car if needed.
Minimum Debt Payments
Pay minimums on everything except your target debt (smallest balance or highest interest). Avoid late fees at all costs.
Everything Else? CUT IT.
Pause: Subscriptions (Netflix, Spotify, gym), dining out, shopping, vacations, hobbies with costs. This is temporary—you'll get it back when you're debt-free.
Every Extra Dollar → Aggressive Debt Payoff
This is the key: After covering the 4 essentials above, throw EVERY remaining dollar at your debt. Extra income, side hustles, tax refunds—all of it attacks your debt until you're free.
💡 Why This Works
Intensity creates results. The average person wastes $300-$500/month on non-essentials. Redirect that to debt, and you'll pay it off years faster.
Example: $500/month extra on a $10,000 credit card (18% APR) = debt-free in 22 months instead of 10+ years paying minimums.
✨ The 80-20 Budget (Wealth-Building Mode)
Use this if you're debt-free or paying off low-interest debt. Live comfortably with 80% while putting 20% towards debt payoff, savings, and investing. This is your sustainable path to wealth.
What is the 80-20 Rule?
Simple: Spend 80% of your income on essentials and lifestyle. Save/invest 20% automatically.
This is the sweet spot between enjoying today and securing tomorrow. You're not depriving yourself—you're paying yourself first and living on the rest.
How to Split Your Income
Essentials + Lifestyle
- • Housing: Rent/mortgage, utilities, insurance
- • Food: Groceries + reasonable dining out
- • Transportation: Car payment, gas, transit
- • Subscriptions: Netflix, Spotify, gym, etc.
- • Fun & Lifestyle: Hobbies, travel, entertainment
- • Clothing & Personal Care
Debt Payoff + Savings + Investing
- • Extra Debt Payments: If paying off low-interest debt (prioritize this first)
- • Emergency Fund: Until you have 3-6 months saved
- • Retirement: TFSA, RRSP, 401k, IRA
- • Taxable Investing: Stocks, ETFs, index funds
- • Down Payment Savings: House, car, etc.
💡 Why the 80-20 Rule Works
It's sustainable. You're not sacrificing your quality of life—you're living well on 80% while building wealth with 20%.
It's automatic. Pay yourself first by setting up automatic transfers. The remaining 80% is yours to spend guilt-free.
Example: If you earn $5,000/month, automatically save/invest $1,000 (20%). Live on $4,000. Over 30 years at 7% returns, that $1,000/month becomes $1.2 million.
Which Budget Should You Use?
Start Budgeting Today
Pick your budget strategy, track every dollar, and take control of your financial future. You've got this.