Agency: Credit Counselling Service of Sault Ste. Marie & District

Topic: Getting your Finances into Shape

Phone: 254-1424

Date: 02/01/01

"Getting Your Finances Into Shape"

Have you ever asked a professional to help you get in shape?

Whether it is through exercise, diet or both, thousands of people spend untold resources on personal trainers, nutrition counsellors, memberships, equipment and books. Far fewer, however, take such a planned approach -- or seek professional help Ė to get their financial situation back in shape. Those who do however, will usually see results that are positive, and often much longer lasting.

Helping people manage their finances is the mission of the 26 not-for-profit member agencies of the Ontario Association of Credit Counselling Services (OACCS). These agencies have a thirty year high rate of success, with less than 2% of clients needing to return for further counselling. The OACCS recommends a five step plan for those who want to take control of their finances.

Where do I start?

After making a decision to improve your personal finances you must follow the following steps: setting goals, assessing resources, establishing the plan, controlling spending and assessing progress. Each of these steps will take you along the road to financial recover.

Why is goal setting so important?

Goal setting provides the motivation which drives the rest of the budgeting process and makes it easier to stay on track when temptations arise. Group your goals according to the time in which you could reasonable expect to meet them: short-term (less than a year), medium-term (one to ten years) and long-term (more than ten years). Be realistic and donít let your over-enthusiasm set you up for a fall. Instead, make your goals "SMART", that is Specific, Measurable, Achievable based on your income, Relevant to your lifestyle and Tentative so that they are flexible enough to be changed if necessary.

Assessing Resources

Determine what income your have each month, then allocate it towards payment expenses, reducing debt and saving for your goals. Be conservative in your estimate, leaving out variables like overtime and bonuses. Those extra amounts Ė if they materialize Ė can then be designated of special extras, whether purchases or savings. If they donít come your way, it wonít hamper your ability to live within your budget. If your income fluctuates month to month, use a low month or a monthly average as your budget base.

How do I establish a plan?

The spending plan, either on a piece of paper r computer spreadsheet, is a picture of how you will allocate your money each month. Divide your expenses into four general categories: fixed expenses, debt payments, savings for goals and discretionary expenses. The first three are essential, and the last is what you would do if you had money left. Designate your income over these categories in order of importance, constantly asking yourself if the item is a "want" or a "need".

How do I control my spending?

Once youíve allocated your expenses, track them to ensure you donít put out more than youíve budgeted. This is the key to making your budget work. Keep a small notebook with you and record expenditures as they happen. Compare these to your budget to see how and where it varies, then make the necessary adjustments. For instances, if you are spending three weeks grocery money in two weeks, determine why. It may be that, because of sales, you purchased three weeks worth of food. On the other hand, it may be due to impulse buys that were "wants" instead of "needs"

Assessing Progress

As with any plan, itís important to step back occasionally and see how well youíre doing. Remember, good financial planning will become a habit but itís a habit that has to be learned and practised before it comes naturally. Like all personal improvement plans you have to stick with it to make it work, but by keeping a positive attitude and looking for ways to improve your budget and record keeping, youíll begin to see your money work for you.


"Helping you get out and stay out of debt" is a series of articles provided by member agencies of the Ontario Association of Credit Counselling Services. All agencies provide a range of no or low cost services to help people solve their financial problems and improve their consumer and money management skills. For more information about credit counselling services in Sault Ste. Marie, please contact Credit Counselling Services of Sault Ste. Marie & District, 298 Queen Street East, Suite 2, Sault Ste. Marie, ON, P6A 1Y7 or visit our website at