This is Robert Smith. He is 24 years old and graduated university about a year and a half ago. He lives in a one-bedroom apartment in the suburbs of Toronto. He takes the subway to downtown Toronto, where he works every day. Since Robert moved out of his parent's house, he has been spending his money left and right. However, in May, he decided to document all his spendings throughout the month in order to establish a steady budget.
Robert's Budgeting Journey
,During the first week, Robert focused on establishing a budget for his rent and utilities. He knows that he has to pay $1.750.00 for his rent and $143.56 for basic utilities such as water, gas, and electricity as they are not included in the bill. Robert made sure to dedicate the combined total of 1924.71 towards these two things.
During the second week, Robert noticed that he spent $68.48 on Internet in his apartment and cell phone plan. As well, he realized that it would be more efficient to purchase a monthly pass to the subway instead of paying every single time. So he purchased the monthly pass for $151.15.
On the third week of his budgeting journey, Robert realized that he had to put some of his money for savings. He had always dreamed of having a car and now he knew that it's time to start making these dreams a reality. Robert decided to put 5% of his pay check in a savings account in order to save up for a new car. In his case, 5% was $127.80, so he dedicated this amount towards achieving his dream.
On the fourth week, Robert went to grab lunch with some of his friends from university, Rick and Martin. On the way there he thought about how he would have to dedicate a section of his budget towards entertainment such the movies and restaurants. "As well," he thought, "I would have to make sure I have enough money for groceries, for when I'm not eating out, and clothes, in case some of mine get lost or ruined". With that thought, Robert decided to leave $40.00 for entertainment, $80.00 for clothing, and $70.00 for groceries.
At the end of the month, Robert learned that if he manages his money wisely, not only can he cover all his basic needs and wants, but he can also save money for a dream or goal that he has. He still had $135.06 on his bank account for any other spendings. He realized the importance of taking the time to pay attention to how you spend money.