How accountants can leverage their skills to master their personal finances
Accountant calculating finances

When it comes to personal finances, accountants have a huge advantage over most people. We’re very comfortable around balance sheets, cash flow statements, budgets - with numbers in general. As a result, we already have many of the skills needed to manage our personal finances. But when you have a busy career, whether in public practice, industry, academia or not-for-profit, you may end up ignoring your own personal finances. Here are four steps to get you on track:

1. Prepare personal or household financial statements

Start by calculating your net worth, which is everything they you own less everything you owe. Think of it as a personal balance sheet. Personal assets may include real estate (your home, an investment or vacation property) and investments (emergency funds, stocks, ETFs, mutual funds, GICs, bonds). Your personal liabilities may include any outstanding student loans, lines of credit, credit card balances, mortgages or home equity lines of credit. You can use a template or create your own spreadsheet and update it regularly – monthly, quarterly or annually. Try to keep your net worth moving in the right direction, with assets growing and debt shrinking.

Next, figure out how much money comes in and how much goes out every month (and every year). Think of it as your personal or household statement of cash flow. Inflows include salary, investment income or income from a business (net of taxes). Expenses can be broken down into overhead expenses (needs, like rent or mortgage payments, property taxes, utilities, groceries) and discretionary expenses (wants, like dining out, entertainment, vacations, shopping and gifts). Once again, you can start with a template. Even though you may not use all of the line items today, the placeholders are reminders of possible future expenses like pets, a car or kids.

2. Pay yourself first

Are savings a line item on your budget? One of the best ways to save is to “pay yourself first.” Every time you get paid, take a certain amount off the top and put it into a separate savings or investment account. To make sure it happens, and to make it really easy, set it up at your bank as an automatic transfer (you can do this online). Instead of spending first and saving what’s left, which is often very little, you prioritize saving and learn to live on what’s left.

3. Track your spending and budget

If you’re having trouble saving and managing on less, you may want to discover where your money is really going. One of the best ways to do that is to track your spending. It’s a great reality check. You may be shocked to learn that your actual spending bears very little resemblance to how you think you spend your money. But accountants know that the numbers don’t lie!

There are different ways to track spending, but accountants tend to like using software, spreadsheets and apps. These days, all of the big banks have tracking and budgeting tools built into their mobile banking apps. You may already be using this app for paying bills, monitoring account balances and investing. The app automatically downloads and categorizes your spending and compares your spending by category to your monthly average. Tracking gets more accurate as the app begins to learn which vendors you use for what, (you may have to do some re-categorizing at first.) You can also set up real-time alerts every time there’s a transaction, as well as notifications that summarize your daily spending. Research has shown that these technological “nudges” lead to a decline in spending.

The app then uses this information to create realistic budgets based on your actual spending. According to the Financial Consumer Agency of Canada (FCAC), tracking your spending and budgeting can help you set spending limits, find ways to pay down debt, lower your expenses and save more, live within your means, reduce stress, and have more money for the things that are important to you.

Tracking your spending brings awareness to your spending habits and will identify your “latte factor”. Those little indulgences and wasteful spending can add up without us really noticing. When you spend out of habit or routine, you rarely ask yourself if you’re getting value for your money. But being more mindful of your spending may lead to more informed — and more satisfying — spending choices going forward.

If the functionality of your online banking app isn’t robust enough, try one of the non-bank personal financial management apps. Or download your debit and credit card transactions to home accounting software.

4. Set up a financial safety net

One of the big lessons of the pandemic has been the importance of having an emergency fund; at least three to six months’ worth of living expenses in cash reserves. An emergency fund can get you through periods of unemployment or unpaid leave due to injury or illness, or pay for unanticipated expenses like a new furnace. The pandemic was also a reminder of the importance of having adequate health, life and disability insurance, as well as automobile and homeowner’s insurance.


A Chartered Professional Accountant by training, Robin Taub began her career at KPMG, transitioned into real estate, and then landed in the complex world of derivatives marketing at Citibank Canada. Today, she’s a professional speaker and the author of The Wisest Investment, Teaching Your Kids to Be Responsible, Independent and Money-Smart for Life. Robin lives in Toronto, where she and her husband have raised two (mostly) money-smart young adults. For fun, she loves to snowboard, cycle and (pre-COVID) go to concerts. She even got backstage once and met Bruce Springsteen. Ask her how – she loves talking about it! 

Robin Taub is a paid Sonnet spokesperson.
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