How to Create a Budget

Taking the time to create a budget is the cornerstone of any financial plan. Your budget tells you where your money is coming from and how it's being spent. And you can adapt your budget according to your changing needs.

Get Organized

• Put all your financial records in order; make sure you have current:
  • investment statements
  • insurance policies
  • pension plan information, e.g., OMERS Annual statement of pension
• Know where your important documents are – use our Location of valuable papers and assets (11.8 KB) form to help you keep track.

Identify Your Expenses

• Tracking your expenses gives you a clear picture of where your money is going. Without a clear picture of your expenses, sticking to a budget will be close to impossible.
• Identify your current expenses: include all your regular monthly bills (rent, taxes, utilities, etc.); review your credit card statements for the past year; track miscellaneous spending for a period; include money spent on recreation and travel. Be sure to account for everything you spend.

Determine Your Income

• Calculate your income based on your take-home pay (after taxes and any other deductions).
• Consider all sources of your retirement income, such as:
  • your OMERS pension
  • government retirement benefits
  • your personal savings
• Determine how your CPP retirement pension fits into your financial plan. There is flexibility around when to start your CPP pension.
• Income from a full-time or part-time job may be part of your financial plan. Know your options if you return to work for an OMERS employer. You may be able to re-enrol as an active member, but your pension would stop until you subsequently retired. Read more about Working while on pension. 

Prepare Your Budget

• With your papers organized and a clear picture of your income and expenses, it's time to work out a budget. It can be as simple or as complex as you wish to make it.
• You can create your budget using a simple paper worksheet, but there are also many online budget tools, calculators or software packages available.
• Review your budget closely and look for any areas that could be improved, and for ways to reduce your expenses and cut spending in areas that are higher than you expected.

Re-assess Your Plan

• Re-evaluate your plan to account for lifestyle changes, priorities and income.
• Review your plan several months before you reach age 65, which is a turning point for OMERS members for several reasons:
  • While your OMERS lifetime pension is paid for life, OMERS bridge benefit is paid only until the month you turn 65. Make sure you have budgeted for this. Your Annual statement of pension (mailed by OMERS in late December) shows the amount of any bridge benefit.
  • Your medical benefits may change at 65. Ontario residents become entitled to benefits under the Ontario Drug Benefit program at age 65, but some products may not be covered, e.g., prescription drugs bought outside Ontario. You may need to budget for extra insurance coverage for medical benefits.
  • Some government retirement benefits start at age 65. Read more about turning 65.