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Are you spending on budget? Check out our budget breakdown.

49% of Canadians use a budget to plan their spending. But do budgets really make a difference?

Considering half of the population is on the brink of insolvency, it would be safe to say that budgets have the potential to make a world of difference to anyone and everyone who actually follows them.

Yet in order for a budget to be successful, you need to determine how to ‘break it down’.

One way to do that is to think of your income as a giant pie that needs to be regularly portioned out to your various monthly financial needs and obligations.

And here’s the thing—those portions won’t be doled out equally.

Depending on where you are on the pay grid, or how much pension income you’re earning in retirement—certain needs and obligations will need to get bigger slices (of your income pie) than others.

To assist with determining those portion sizes, here is a guideline as to what percentage of your income pie should be spent in the following areas:

Whether you’re paying rent or have a mortgage, ideally you should be spending no more than 35% of your total income on housing.

That 35% includes the following:

  • Mortgage/rent payment
  • Property taxes, condo/strata fees (if applicable)
  • Insurance

If you happen to be over that number by 5%, there is no need to stress.

However, if your housing costs are 45% or more of your earnings, you run the risk of stretching your budget dangerously thin in other areas, which could lead to increased usage of credit cards and loans as a way to fill the gap in your finances.

This is where you’ll want to be extra cautious if you’re looking to apply for a mortgage for the first time.

For every $450 of monthly consumer debt obligations under your belt (i.e. car loans, credit card payments, etc.), financial institutions will reduce the amount of mortgage you can qualify for by $100,000. So you’ll want to do your best to keep your debt under control to maximize your mortgage borrowing power.

Also don’t forget that your finances will also have to pass the mortgage stress test. So the more you can stick to your budget breakdown, the better your chances at getting approved for the mortgage you want.

Did you know? As a mortgage broker, Educators Financial Group has access to multiple lenders, which means not only landing you a competitive rate—but also a mortgage that meets your specific needs. Learn more about our mortgage options.


Unlike housing costs (which are pretty much fixed), household expenses are regular costs that tend to fluctuate depending on variables such as usage and the type of plan you have.

These expenses include everything from (and not limited to):

  • Internet/cable
  • Streaming services
  • Utilities (e.g. water, gas, heat, electricity, etc.)
  • Telephone

If you suddenly find yourself facing financial difficulties, these are the easiest group of expenses to trim from your budget in order to maximize cash flow in the interim. Cash flow you can then direct to more important slices of your budget such as housing, or food.

FOOD = 15%

Next to shelter, food is one of life’s necessities. How far this portion of your budget goes will naturally depend on whether you’re eating for one, or have a house full of mouths to feed. So use your discretion in order to budget accordingly.


You’ve got places to go—and as an education member, the summer months means having even more time to spend travelling to all of them. Just make sure you’re not spending beyond your means to get there.

The 15% transportation slice of your budget pie should encompass all of the following:

  • Transit fares/passes
  • Car payments/rental
  • Maintenance
  • Insurance
  • Gas

If you have debt, your goal should be to pay it off as soon as possible. This will naturally depend on how much income you’re bringing in and all of the other regular financial obligations you have on your plate. If you’re looking to pay debt down faster, consider cutting from other areas you can live without (at least for the time being) in order to increase this portion of your budget.


From the musthaves to the nice-to-haves—this is the portion of your budget set aside for spending money just for you (because it’s nice to feel like not all of your income is going towards paying bills).

The personal part of your budget allowance would cover such things as:

  • Entertainment (e.g. going to the movies, dancing, gaming, etc.)
  • Shopping for clothes
  • Eating out
  • Haircuts
  • Hobbies

When you leave room in your budget to treat yourself every now and then, you’ll be less likely to make splurge purchases every time you hit the mall or browse your favourite shopping apps. You can even challenge yourself to save up this portion of your budget for times of the year when you’ll have more time on your hands (such as March Break and the summer months). That way you will have already set aside cash flow within your budget for these typically higher spending times, which will help you to rely less on credit cards (and racking up debt).


While you’ve got retirement savings in the bag (thanks to having a pension plan in place), you should get into the habit of allocating a portion of your income towards saving for all of your other goals in life.

This part of your budget is to save for anything and everything, such as:

Did you know? According to an online study by the Canadian research firm Pollara, Canadians are willing to go into debt for vacations—with 64% of Canadians planning to use their credit cards to pay for their trips away.

Keep in mind that the percentages above are purely a guideline for keeping your budget on track.

As long as the numbers add up to 100%, how you slice up your own budget pie is ultimately up to you.

You can also use our handy dandy budget calculator, right here.

Are you budgeting for a specific financial goal? Educators Financial Group can help with that.

From pay grids to pension plans, serving education members since 1975 has given us a unique understanding of your finances. That means whether you’re working or retired, we can provide you with the right strategy to make your money work harder so you can achieve your financial goals, faster.

Have one of our financial specialists contact you about making your future goals happen.

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