Prioritising spending starts with a clear distinction between needs vs wants. Knowing the difference helps you protect essentials, save for goals like a home or retirement (RRSP/TFSA), and still enjoy non-essential purchases without guilt.
Why it matters for Canadian households
Needs pay the bills and keep you secure: housing, food, utilities, insurance, minimum debt payments, basic transportation.
Wants improve quality of life but aren't essential: dining out, streaming platforms, designer clothes, vacations.
Prioritising gives you room for savings goals (emergency fund, RRSP, TFSA, RESP) and keeps you resilient against income shocks or rising costs (see the Bank of Canada's information on inflation).
Quick checklist — Is it a need or a want?
Needs
Rent or mortgage payments (including CMHC-insured mortgages considerations)
Groceries for basic nutrition
Utilities, home insurance, basic cellphone
Minimum debt payments and compulsory taxes (see CRA My Account)
Essential health and life insurance not covered by public plans
Wants
Upgraded tech, brand-name items, frequent takeout
Multiple streaming services, premium subscriptions
Luxury travel or non-essential renovations
Step-by-step: How to prioritise your spending
Track all income and spending for 30–60 days.
Use a chequing account statement, credit card history or budgeting apps.
List fixed and variable expenses.
Mark which are needs and which are wants.
Build or confirm the essential baseline budget.
Essential: housing, utilities, groceries, minimum debt, insurance, transportation.
Set short- and long-term savings goals.
Emergency fund (3–6 months), RRSP/TFSA contributions, RESP if you have kids.
Allocate remaining money using a rule that fits you.
Examples: 50/30/20 (50% needs / 30% wants / 20% savings) or zero‑based budgeting.
Adjust wants without eliminating them.
Prioritise high-value wants, pause low-value subscriptions, set sinking funds for big purchases.
Practical strategies to spend smarter
Pay yourself first: automate RRSP/TFSA and emergency savings transfers each payday.
Audit subscriptions quarterly: cancel or combine services you don't use.
Negotiate recurring bills: phone, internet, insurance—ask providers for better rates.
Use cash for discretionary spending: envelope method to limit impulse buys.
Delay big wants: use a 30-day rule for non-essential purchases to reduce buyer's remorse.
Tackle high-interest debt: focus extra payments on high-rate credit cards before increasing wants.
Special cases
If you have high debt: prioritise minimum payments and an emergency buffer. Use a debt repayment plan (snowball or avalanche) while trimming wants.
If you have variable income: base your essential spending on a conservative monthly average and direct surpluses to savings or variable wants.
Families: factor in RESP contributions, childcare, and larger emergency buffers.
Useful Canadian resources
Financial Consumer Agency of Canada (FCAC) budgeting tools — templates and calculators for making a budget.
Canada Mortgage and Housing Corporation (CMHC) — housing and mortgage info.
Canada Revenue Agency (CRA) — tax and benefit information.
Bank of Canada — data on interest rates and inflation.
Final checklist to get started
Track spending for 1 month.
Create a needs-only baseline budget.
Automate savings: emergency fund, RRSP/TFSA.
Trim subscriptions; set limits for wants.
Revisit priorities quarterly or when life changes (job, family, housing).