Taking care of your finances can be a stressful time. Many of us have been through stages of frugality and also times where we perhaps could have benefited from reining in our spending, however sticking to regular, savvy spending habits is a rarity for lots of us. The thing is, we don’t need to live a miserable life of penny-pinching, forbidding ourselves from buying treats and going out, to save money. To help get you on track, we’ve put together some of our best tips for managing your money as a Canadian, and what sorts of things you can try to secure your income and even have a chance of boosting it.
Getting to grips with the world of finance, in general, is a perfect starting position for someone looking to save some money. Of course, there’s no reason to suggest that if you don’t read lots of finance-related books and articles that you cannot possibly save a single penny but getting a better understanding of this puts you in a stronger position to save. Spend some time every day—even just 5 minutes in the morning when you’re having your coffee—reading up on financial news and checking out other resources online such as videos on money-saving or even simple articles about the history of money for example. Whatever you choose to read, knowing that you’re getting a better understanding of how finance works will boost your confidence when dealing with your own funds, and set you in good stead when making financial decisions.
Plan Your Finances
Alongside educating yourself, you’re going to want to start planning your spending and savings and this could work similarly to if you owned a business. Think of this next step as writing a sort of business plan for your personal life. This is where, for the next 5 years or so, you can lay out your goals and aspirations, so you know what you’re going to need to save, and what is free for you to spend. It may also help to inspire you to pursue new avenues of income or find a more profitable career. As well as this plan, you’ll want to create yourself a budgeting sheet, perhaps as a spreadsheet using something like Google Sheets or Microsoft Excel. Lay out all of your income streams, and your guaranteed expenses like your mortgage or rent, utility bills, and then essentials such as groceries. After that, you’ll see whatever you have left over which can be spent and saved however you choose. We highly recommend putting some of that aside into savings and possibly an emergency fund which should help you to manage any unexpected expenses, like medical payments or vet bills for pets.
Automatic Savings Account
When it comes to thinking of things to do with your money, you could consider saving it in an automatic savings account. This would be where every month, a portion of your income is taken straight into savings via a pre-authorized deposit. This is especially good if you find that you’re somewhat unreliable when it comes to manually adding money to savings. Let’s face it, nobody really enjoys putting money somewhere where you can’t use it! However, setting up this automatic system removes the temptation to keep those savings for a month or two instead of squirreling them away for the future. Have your savings account set to automatically take a portion of your income from your primary bank account each month.
Invest Your Money
If you find that you’re getting a significant amount of money left over after handling you essential payments, you could use some of that savings money for investments. Whether you choose to actively buy and sell stocks in your spare time or just passively leave money in an investment portfolio and check it maybe once a month to see how things are going, this could be a great way to save some money and potentially make some profits too. If you are looking for a more active investment opportunity, you could try getting into the world of cryptocurrency trading such as Bitcoin and Ethereum. If you’re interested in finding out how to buy Ethereum in Canada, check out this handy article from Wealth Simple. The process of investing in these crypto coins is not overly complicated and could be an interesting and exciting way to make some profit. Remember though, never invest anything you can’t afford to lose as there is an element of uncertainty in many marketplaces.
Start A Side Business
This option isn’t for everybody, but if you’ve always been interested in starting a small side project alongside your career, the extra money you save each month could be put towards funding this. If you’re the creative type and enjoy crafts like candle or soap making, for example, you could fund the acquisition of these materials as well as packing and delivery costs. Using these savings to essentially create a new income stream, if you believe you have good potential customer base, is a great idea, as you’re no longer using that money for passive savings, you’re instead using it to generate more money.
Pay Your Debts
Our debts, especially any that include interest, are the biggest drain on our income by far. Credit cards and loans like mortgages or finance plans are going to reduce your income drastically if you don’t manage to pay them off. While a mortgage is of course going to take a long time to pay off, and many people may not even manage to get rid of altogether, there are some debts we end up accruing that are worth focusing on presently, to reduce the amount of income we lose in the long run. It might not be fun to pay off thousands of dollars worth of debt in a couple of months but being intensely frugal now and focusing on that debt will mean that you have much more free flowing cash in the future, and you’ll stop paying that extra interest which is basically just an unnecessary expense for you.
Sleep On It Before Spending
What we mean here is simply to not rush into any large purchases, especially after you’ve just been paid. It can be very tempting to splash the cash after your paycheck comes through, especially as you may have been running low on fund the week before. However, try to remember how stressful it can be to have to survive for weeks with very little excess cash to spend. To prevent this unpleasant experience from happening again, save those big purchases until a few weeks after being paid. This not only means that you will theoretically have to survive for much less time with less money in your account, reducing the amount of time you can be hit hard by an unexpected bill and risk being unable to pay, but you may also find that you don’t even want to buy that expensive item anymore. Sometimes we can feel compelled to buy luxuries just because we have money but taking time out to really think about it can often lead to us realizing we don’t want or need it.
Research Large Purchasing Decisions
If you are set on buying that luxury item after taking some time to think about it, there is another step you should think about to make sure you’re getting the most out of your money. That is to do your research before committing to a purchase. Shop around for the best deals possible and it may even be worth looking at second-hand options, depending on the item. If you can knock a few hundred dollars off of a big purchase by getting something that’s used but in good condition, you’re getting the luxury you want while being able to put that excess cash into savings or even put it towards something else you want. Essentially, you’re getting what you want but stretching out that purchase to include even more! It’s easy to just jump at the first full-priced buying opportunity but with a bit of patience and research, you could get way more bang for your buck.
Cut Back On Unnecessary Purchases
This may seem like an obvious suggestion but it’s one thing we can all struggle with. You might think that ordering pizza once a week, or spending a bit more on branded groceries isn’t too much of a problem, and while you might have a point, have you ever looked at exactly how much you spend on these things over the course of one month? If you were to say, order takeout once a week, you could be looking at spending well over $100 per month, depending on how many you’re buying for of course. Whereas buying branded items at the store may only be adding a dollar or two to your bill, but when it’s several of these items once a week, you could easily be looking at another $100 or so. Even just being slightly conscious and cutting these purchases in half, by avoiding big brands where possible, or maybe only ordering food twice a month, doesn’t impact your life that much and you’ll be surprised at how much money you’ll begin to save.
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