Making a budget is the best way to manage personal finances, says expert

While the holiday season is filled with joy for many New Brunswickers, the cost of gifts, food and gas in the current economy often leaves families feeling financially burdened by the new year. 

Marissa Sollows, the director of communications and public affairs for the Financial and Consumer Services Commission of New Brunswick, said costs are not expected to go down in 2024, but there are still ways to manage.

"It is stressful to manage money in the best of times and it can feel downright impossible to get ahead when you're facing these higher prices," she told Information Morning Fredericton.

Sollows said her best tip for managing funds is to create a budget. 

"I can hear the collective groan when I say to make a budget, but a lot of people don't have a clear budget and it doesn't need to be complicated," she said. 

Sollows said people who don't budget can quickly overspend.

She said a budget is something that can be jotted down on a piece of paper or written out on the computer. It should include fixed income, fixed expenses and any small discretionary expenses, including subscription and regular coffee purchases. 

"Those discretionary spending items … those are the ones that can really add up and hurt your cash flow situation," said Sollows. 

She said budgets should be reviewed regularly, especially for those doing shift work. 

She said the budget has to work for each individual.

"If that $2 coffee each morning is something that brings you joy and makes getting out of the door in the morning easier for you, that's not the end of the world but you need to work that into your budget," said Sollows. 

"It doesn't mean denying yourself everything when you have a budget, it means knowing where your money is going and taking control of it." 

Small amounts can add up

Sollows said saving money with a tight budget can feel impossible, but setting aside even small amounts of money can add up over time. 

It's recommended to have a savings equivalent to three times a household's monthly expenses, which can equip people to quickly recover when faced with unexpected costs. 

Sollows said she views savings as a bill within her budget. She has set up automatic transfers to herself each month to ensure money is set aside for emergencies.