Do you have a budget? Do you stick to it — most of the time?

As a finances coach, these are probably among the first few questions that I’ll ask you, along with some other “big” questions, like the following:

• Do you know how much your take-home pay is?
• Do you know the total value of your assets?
• Do you have an emergency fund to cover your costs if you’re out of work for six months?

I think that having a budget is fairly important. The process of creating one will answer a lot of questions for you, even if you don’t continue to track your expenses and record them. When my husband decided to retire in 2014, we wanted to know if we could afford it, as his retirement income would be considerably less than what he was making while at work. To create a monthly budget, I took the last three months’ worth of credit card statements (we do everything by credit card) and categorized each amount. The average of the amounts in each category became our budget number. We haven’t concerned ourselves so much with tracking our numbers each month and making sure we’re sticking to our budget, but I do a three-month retroactive checkup about once per year.

Recently I’ve noticed that we’re spending a lot more on groceries than budgeted for. It has a lot to do with the low Canadian dollar and produce purchased from the US, but also our two teenage/young adult children who are still living with us — they eat a lot! However, we also throw out food, a lot more than we should. So we decided to start tracking our grocery and restaurant spending to see if we could keep it within the budgeted amount.

We’re now 22 days into February, and so far, so good, but it’s close. We’re 76% of the way through the month, and 74% of the way through our budgeted amount. We’ll have to keep a close eye on our food spending for the next week and make an effort to use up the food that’s already in the house. This should be interesting as we have visitors coming to stay with us for two days and a restaurant meal with friends booked for the weekend!