Newcomer Budgeting: My Realistic 50/30/20 Budget

In our recent piece on savings guilt, I talked about the emotional side of money. Today, I want to share the practical side. So, here’s what my real 50/30/20 budget looks like as a newcomer who’s now a few years into life in Canada. 

A Bit About Me 

To give this budget some context, here’s my profile: 

• Household: Two adults, no kids (yet), one deeply loved dog 

• Time in Canada: Arrived in 2019; became a permanent resident in 2022. Partner was born in and has always lived in Canada.  

• Location: A moderate-cost regional city 

• Housing: We own a three-bedroom townhouse 

• Lifestyle: We travel regularly, but nothing fancy—local trips, camping, and budget-friendly accommodation 

None of this is meant as a blueprint. It’s just the reality of our household so you can see how the 50/30/20 split plays out in practice. 

What’s a 50/30/20 Budget Framework?

You’ll want to check out our Savings 101 piece for a detailed breakdown, but basically a 50/30/20 budget means spending approximately 50% on needs, 30% on wants, and 20% on savings and/or debt.

50%: Needs 

Half of our budget goes to the things we genuinely need to live and work in Canada. That includes: 

• Mortgage
• Utilities (electricity, gas, heating, water), plus internet and phone plans
• Strata fees (the joys of townhome ownership!)
• Property taxes
• Health spending
• Insurance: one car, home insurance, term life insurance, and pet insurance
• Car costs: gas and maintenance on a ten-year-old secondhand car we own outright
• Clothes (we have a set budget each year for essentials, anything beyond that is ‘fun money territory’)
• Groceries: around $850/month, mostly home-cooked meals. I expect this to creep up to the $1000-$1200 mark each month with a child.
• Pet expenses, including food, grooming, flea/tick, and annual checkups/vaccines. Anything else is a want.

And because something always comes up, we add a 10% buffer for forgotten or unexpected needs.  

30%: Wants 

This is the category people often feel shy talking about, but honestly, it’s the part that makes the rest of the budget sustainable. Our “wants” cover: 

• Individual “fun money”  
• Wellness and hobbies spending 
• Subscriptions: streaming, apps, and other recurring small costs – for context, our limit here is $30 a month. So we’re constantly cycling between subscriptions we actually use instead of having ten and using none of them. 
• Renovations (more on that below) Weekends away, usually the camping-and-cabin type
• Vacations, usually big international trips to see family or friends abroad. These are occasional and we save up for a long time in advance. 

20%: Savings 

We don’t currently carry debt beyond our mortgage and monthly credit card balances, so our full 20% can go toward savings. 

Here’s how that breaks down right now: 

• ~15% invested

• ~5% set aside for growing our emergency savings in anticipation of having a child.

Once we’re on parental leave, we expect this category to drop closer to 0–5%, simply because our income will be temporarily lower and we’ll be using our cash savings during this period (hoping to not touch our investments!). And honestly? That feels like a reasonable trade-off in this economy. 

A Few Honest Notes About My Canadian Budget 

• My partner and I combine finances. It’s not everyone’s preference, but it works for us. We share all expenses, and then each get an equal amount of personal fun money in separate accounts so no one needs to “ask permission” to buy something. 
• We bought a fixer-upper, and we’re cash flowing our (largely DIY) repairs. Renovations have consumed a big chunk of our “wants” category over the past two years. Buying an affordable house (even if we could have borrowed more) was the right choice for us — despite the quirks of the house. Though, we have had a few surprise expenses come up, like the washing machine leaking when we first turned it on and the dishwasher being basically held together with glue. It’s a good reminder for newcomers that homeownership comes with ongoing, often unexpected costs. 

• We prioritize used, where possible (and safe/hygenic). Our couches, patio furniture, sofa bed, nightstands, storage cubes, and dresser? Marketplace. Dining chairs, ice skates, and credenzas? Hand me downs. We prioritize getting high quality used furniture over fast furniture we’d need to replace. We’ve saved a ton of money on furniture that should last a long while.

Canada isn’t the easiest place to build financial stability—especially as a newcomer—but budgeting frameworks like 50/30/20 can help you create structure without feeling restricted. If seeing my real numbers helps ground your own expectations, then this exercise was well worth it. 

Newcomer Budget Breakdown: Q&A 

How different is your current budget from your first-year budget in Canada? 

Oh, completely different. When I first arrived, I didn’t follow any kind of budget at all. I just checked my chequing account, made a judgement call about whether I felt like I could afford something, and hoped for the best. Progress was slow—surprise, surprise. 

Now we actually have a system, and that’s the game-changer. The 50/30/20 framework takes the decision fatigue out of everyday spending and it cuts down the guilt that used to come with money choices. I’m a huge fan because it gives me structure without feeling restrictive. 

How much do things like your dog’s expenses affect your month-to-month predictability? 

Every year, my partner and I sit down, download all of our transactions, and categorize them (well, now ChatGPT does that for us) — groceries, dog, maintenance, travel, everything. Then we look at what we actually spent over the last 12 months and compare it to the kind of lifestyle we want. 

Dog expenses are part of that picture, and looking at the annual total helps us predict what we’ll spend month to month. It’s not perfect, but it keeps us on track. 

You drive a 10-year-old used car. Was that a deliberate budgeting choice? 

Sort of! I’m lucky because my partner already owned the (used) car when we met—and thankfully, he made a very sensible choice. From my perspective, it’s paid off, it runs well, and replacing it would be a huge financial decision I don’t think we need to make right now. 

Cars can make or break a budget, so I’m very happy sticking with one reliable, paid-off vehicle (he has a work vehicle, though I’d love to be a one car household!). Maybe one day, when I’m older and wealthier, I’ll think about upgrading. But today? Not worth the cost. 

How do you decide what counts as a “want” versus a “need” in practice? 

Great question. For me, needs are the things that keep me safe, secure, and able to function in Canada. Wants are the things that make life more comfortable—but aren’t strictly essential. 

But it’s not always cut and dry. For example, we don’t need a three-bedroom townhome. It fit within our 50/30/20 framework, so we could afford it and it supported the lifestyle we wanted. If our financial situation changed and our mortgage became too expensive, that same home could easily shift into “want” territory. So the definitions move with your circumstances. Though I will note, it’s always harder to remove ‘needs’ from your lifestyle than wants, so be careful what you add when you have lifestyle creep. 

What do you prioritize in your savings: retirement, emergencies, future childcare, or something else? 

If there’s ever high-interest debt, that gets priority—no question. After that, I keep a four-month emergency fund at all times. If it dips below that, rebuilding it becomes priority number one. 

Once the emergency fund is topped up, I focus on my TFSA and RRSP.  

As for future childcare… I might have my head in the sand a little. I’m hoping we can absorb the cost into the budget by tightening some areas and no longer funding the house renovations. But childcare is expensive—sometimes shockingly so—so we’ll see how feasible that is. It’s definitely on my mind. 

You travel regularly but keep it budget-friendly. How do you plan affordable trips? 

We start with the budget, not the destination. Whatever amount we have in our vacation fund dictates the kind of trip we can take. Sometimes that means a couple of nights in a hotel and eating out while we’re there. Other times it means camping and living off the camp stove. 

Most of our camping gear is secondhand—nothing fancy, but perfectly functional. We’d rather make the trip happen with what we have than spend hundreds of dollars on ultralight equipment. It’s about the experience, not the aesthetic.