Why my budget never works? — BAIE
BAIE is an acronym for Budgeting for Annual and Infrequent Expenses. If you've had trouble with your budget, annual and infrequent expenses are often the reason why your budgets might not work and lead to frustrations. We’ve identified 4 main expense categories that should ideally be saved thought the year.
The expense categories are the following. • Housing • Transportation • Personal • Emergency funds
Each category has subcategories. For instance, under Housing, we recommend saving the following. • Heating (if not equalized) • Municipal and school tax • Maintenance and renovation (1% of your home value)
How it works. We help you determine your projected cost and divide the amount by numbers of pays you receive a year. If you are paid bi-weekly, divide the amount by 26, twice a month, 24.
We also recommend opening no less the four bank accounts and set an automatic withdrawal from your main spending account.
We like working with Manulife bank, they offer high interest, and you can nickname each account to identify their role.
Generally, we conduct a full analysis and help you set up your personalized BAIE principal.
Before you act on this
Articles here are general in nature and do not account for your particular circumstances. Tax rules, contribution limits and program thresholds change, and the treatment that applies to you depends on your province, your residency and the structure of your holdings. Speak with us before making a decision based on anything written here.