Understand where your money is going, then learn how to cut down on expenses
If you are like most Canadians, the past few months have been expensive. Whether you are facing higher mortgage payments, grocery bills or just some unexpected expenses landed on your lap, things are tighter than ever.
Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails or any newsletter. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300A welcome email is on its way. If you don't see it, please check your junk folder.We encountered an issue signing you up. Please try againIn fact, Canadians are facing near record-high debt levels. According to Statistics Canada, Canadians now owe $1.83 for every dollar of disposable income they bring in. That’s up from $1.77 last year. Whether you are looking to pay down your debt, or just find more cash, making big budget changes can be painful. Even so, the process can help you learn more about how you spend, what you truly value and what kind of slow, incremental changes you can make in the future to build good habits. It starts with knowing where your money goes. Once you start tracking how you’re spending, stop and examine whether the things you need and value match where you’re spending the most.Article content Spending more than you expect? Not getting enough value? Time to cut it out. Nowhere to cut? Time to focus on increasing your income and boosting your savings.Before you can find savings, you need to track where you are spending. Taking a look back at your credit card and debit transactions for the past month should give you a quick snapshot. Many banks and credit card companies offer tracking tools that will show you a breakdown of your expenses. Better yet, if you have accounts at multiple financial institutions, you could use a budgeting service that tracks them all. Popular free services include Mint and Goodbudget. Paid options like, You Need a Budget have more extensive features, but will cost you.Article content Also, if you deal with a lot of cash, don’t overthink it. Basic paper and a pen, or a spreadsheet can help you quickly get a sense of what your bills are. Then write out what you want your budget to be on discretionary expenses such as entertainment. If you need more discipline with your spending, a simple way to see where your money is going is with cash stuffing, also known as the envelope method. The concept is simple, you take your paycheque in cash and divide that into envelopes based on your budget for different needs, including both spending and saving.Once you have a good idea of how much you’re spending, you’ll probably see places to cut. Depending on how much money you need to save, and how fast you want it, you may need to be ruthless about your cuts.Article contentDiscretionary spending, like your daily Timmies, is easiest to cut, but don’t make yourself miserable unless you have to. The primary goal is to save money fast, but the secondary goal should be to build a sustainable savings habit so you never have to make sudden sacrifices in the future. Think about those small joys that are worth the cost to you. If getting a $3 latte brings you far more joy than $3 spent elsewhere, get the latte. But if you’re grabbing coffee and breakfast, plus lunch out at a total of $20 a day, it adds up fast. You are looking at $100 a week, $400 a month and, you guessed it, $4,800 a year. Sure, a lunch out can feel special, but a treat isn’t a treat when you do it every day. Then you just have an expensive habit.Article content If you aren’t ready to pack your own lunch or meal plan, don’t worry. Consider buying nice ready-made meals at the grocery store or even a meal kit. Sure, they are more expensive than cooking from scratch but if it stops you from ordering UberEats and paying for delivery, plus tip, you are saving some money.If you think your fixed expenses are, well, fixed, think again. A little research and being open to change can help you save without cutting corners. An easy way to reduce your phone bill is to switch to your cellphone provider’s discount brand. You’ll stay on the same network but likely pay way less starting this month.This advertisement has not loaded yet, but your article continues below.You should also call your internet service provider saying you’re planning to switch and see if you can get a retention offer. For essential purchases, make sure you aren’t leaving money on the table. Besides using a cash-back credit card on your daily expenses, you canby connecting your debit or credit card to RBC’s Ampli app. Purchases at places like Petro-Canada and Lowes count towards cash back. If you’re carrying a hefty balance on a credit card, consider signing up for a balance transfer card with a lower interest rate. You might pay a fee for the transfer, but you’ll get a reprieve from interest for a while. You can also look into a personal loan, which would likely have lower interest rates than your credit card, and allow you to transfer balances.Article content
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
“What Fact Are You Just Tired Of Explaining To People?”: 40 Things These People Wish Others Would Finally UnderstandWe live in a world where, whether we like it or not, we run into people with different views of the world, beliefs, and opinions. And sometimes we just get tired of making sure people get their facts right.
Read more »
Did Team USA get jobbed on goalie interference? Not if you understand the IIHF rulebookAll the outrage over the two disallowed goals in the WJC semifinal comes from people judging a rule by its...
Read more »
Give standup comedy a try at Sudbury open mic seriesSudbury comedian Cole Leonard said he’d like to increase the profile of the local standup scene
Read more »
Did Team USA get jobbed on goalie interference? Not if you understand the IIHF rulebookDon't cry for Team USA over supposed blown goalie interference calls at the WorldJuniors, writes MikeMcKenna56. If you judge them by the IIHF rulebook and not an NHL rulebook bias, the calls were correct:
Read more »
Republicans Will Try to Protect Strategic Petroleum Reserves in Energy BillsThe Republican proposal would tie the tapping of the SPR to sensible policies designed to help the nation's energy independence and security.
Read more »
Is your budget bursting? Try these 3 simple ways to save moneyUnderstand where your money is going, then learn how to cut down on expenses
Read more »