Introduction: Budgeting Starts with Cash Flow Planning
Before you can budget effectively, you need a cash flow plan. (If you haven’t done this yet, [read our cash flow guide] first.) Why? Because once you’ve accounted for committed expenses (rent, utilities, debt payments, etc.), all that’s left is your disposable income—the only number you need to actively manage. If you’ve done the cash flow planning exercise like I recommend, then you now know what your disposable income and that’s the absolute maximum you should spend, and ideally less because you want to leave some for investments.
This approach cuts through the noise. No tracking every coffee purchase. Just one key metric to keep an eye on.
A Philosophical Take on Spending Control & Budgeting
My philosophy on spending control is quite simple: develop a natural sense of discipline and then make it a habit. Penny pinching helps but in the grand scheme of things it’s unlikely to help you achieve bigger goals. Will saving $20 here and there add up? Absolutely. But one should strive to save money using the least amount of effort possible.
The degree of difference you will make trying to pinch every penny vs trying to work on a side business or upgrading your skills is enormous. A lawyer can charge $500 per hour while a minimum wage worker might be making $20 or whatever the current rate is. Upgrading your ability to earn more will in general make more difference than saving a few dollars here and there.
However, nothing says you can’t do both. I suggest only spending about 15 minutes a month to review your finances. If you follow my tips below, spending control shouldn’t be a time consuming task.
Most importantly, immigration is likely to cost a lot of money. Having control over your spending becomes more important than ever.
5 Budgeting Tips From An Emigrant
I have a more in-depth post about credit cards for immigration here.
1. Credit Cards Are Your Friends
Credit cards can be powerful tools—if you have self-control.
- Pros: Cashback, rewards, and fraud protection.
- Cons: Easy to overspend if you’re not disciplined.
If you’re not disciplined, then get disciplined. This is not someone else’s responsibility. It’s your life and your finances. There’s zero disadvantage to using a credit card if you’re someone who’s financially responsible. Paying the balance off on time avoids all interest. Forming a habit to review your finances once a month also makes it easy to remember to pay your credit card statement every month. NEVER incur any interest on your credit card as the interest rates are often 20% or above.
I only use no annual fee cards. This way I don’t feel compelled to spend a certain minimum amount to make it worthwhile. But if you have a certain level of committed expenses that makes it worth while for your situation, then by all means.
I have 3 credit cards, with 90% of spending on one primary card. Since committed expenses (like rent) usually can’t be paid via credit, this makes tracking discretionary spending effortless. I merely need to look at my monthly statement balance to know how much I spent on discretionary items. Focus your energy on other important things in life.
Why 3 credit cards? They have slightly different functions. I keep one Canadian credit card to settle my Canadian phone bill and it’s useful if and when I visit Canada for leisure. The other two are local Hong Kong credit cards with different perks. Both have no fees and I mainly spend on one of them.
2. How Strict Should You Be? A Canadian Emigrant’s Take
- If you’re financially secure, just review your credit card statement monthly. I compare total spending against my disposable income target—no item-level tracking.
- If money is tight, use Excel to categorize transactions and take a deeper look.
I find that some people go overboard and try to track every coffee purchase. Please. Stop. You’re losing sight of the bigger picture when you go down this path. If you need to worry this much, you should just stop buying a cup of coffee everyday. Perhaps switch to making your own coffee at home. Tracking and solving the problem are two different steps. If you need to track every coffee purchase, the issue is not how you track it. The issue is that if you need to worry about the spending and it’s not a necessity, then you probably shouldn’t be spending it.
3. Excel > Budgeting Apps (Here’s Why)
Most banks and credit cards let you export transactions to Excel. With basic formulas, you can:
- Sum monthly discretionary spending in 2 minutes
- Compare actual vs. target spending
- Spot trends (e.g., “Uber Eats is 20% of my disposable income”)
No fancy apps needed—just a spreadsheet and 15 minutes/month.
If you don’t know how to use Excel, I think you should invest the time to learn it.
4. Focus on Value Rather Than Price
Something that is $100 but will last 10 years is probably better than something that is $50 but will likely break within one year. However, this is not a fair comparison these days. There’s nothing that says the $100 product won’t become obsolete in the near future. Besides, the expensive item can also break.
Making good purchase decisions takes a lot of wisdom and probably deserves its own article. But the point I want to make is that one should never focus on just the lowest priced items. However, nor should you always assume higher priced products are better. Having moved to Hong Kong now, I’m finding that many products from the mainland are quite decent in quality and the prices are attractive.
Ultimately you need to understand the product you are paying for. If you’re buying fruits, then know when they are in season where they would both be better quality and better priced. If you’re buying a t-shirt, understanding if you are paying for the brand, or for truly for the quality of the t-shirt. Most t-shirts will be subject to wear and tear regardless of the brand.
5. Don’t Over-Plan
It may sound strange coming from me but leave a bit of room to take advantage of ad-hoc opportunities. Like don’t draw up a monthly budget and plan out exactly what you will buy at the supermarket a month in advance. Flyers come out weekly! Planning too strictly (and also acting upon them too early) can lock you out of opportunities.
My personal approach has always been to set a discretionary spending limit and stick with that. I never had a need to set smaller buckets like meals and entertainment. You can leave some room to splurge as long as you’re not pay cheque to pay cheque.
A good example of this is travel. While each year I have a sense of where I want to go, I’m quite comfortable to change my plan if cheaper tickets emerge. I also look at exchange rates. If that country’s currency falls, that’s a stronger reason to visit that country instead of another country. If you tell yourself “I must go to Greece this year” and the Euro is at an all time high, then maybe it’s smarter to visit another destination that you’re equally interested in.
What I do is a have a rough draft of each of the destinations I want to travel to. Like which cities to visit, and have a sense of how many days I need to spend. Then because I’ve done my research already, I can execute more quickly when the right opportunity appears.
Conclusion: Budget Like a CEO
Be like a CEO and think of the bigger picture. Don’t get caught up in trying to save every penny. Many budget guides I’ve read suggests to spend more time and review regularly. I somewhat disagree. Budgeting and spending control should be a habit, not a monster that you need to babysit. Focus more on your Cash Flow Planning so you see the bigger picture and can act strategically.
A smart budget should:
✅ Require <30 minutes of your time per month
✅ Protect your disposable income target
✅ Push you to grow income, not just shrink spending