Establishing a household budget is the first step to gain or maintain control of your finances if you’re laid off. "A budget is telling your money where to go instead of wondering where it went" explains author John Maxwell.
The benefits of budgeting are compelling, particularly during lean times. Budgeting is as simple as keeping a record of money you have coming in (from employment insurance and/or other benefits) and payments you need to make (such as your rent or mortgage, living expenses and regular spending). With a budget, you can:
- Reduce some of your financial worries that come with losing your job, by knowing how much money you need to make necessary payments.
- Get your spouse, your children and other loved ones to understand your financial situation. Agreeing on how you’ll use your household income to cover important living expenses can also help to reduce stress.
- Prioritize what's important to you, knowing where to spend less and potentially where to save.
- Be more disciplined with your purchases and adjust so you are living within your means. This attitude can benefit you no matter what your financial situation is.
Want to start budgeting?
You can set up a spreadsheet on your computer, write your budget on a piece of paper or use tools like Manulife’s online budget planner.