How to Get Better with Money: Smart Habits for Your Financial Future

Getting better with money doesn't happen overnight, but it doesn't have to be complicated either. Whether you're juggling debt or struggling to save, small changes can lead to big improvements over time.

The truth is, most of us know the basics: spend less than you earn, save for emergencies, avoid unnecessary debt. But knowing what to do and actually doing it are two very different things.

Between inflation recently reaching a seven-month high and mounting debt loads, many Canadians feel stuck when it comes to their finances. However, with nearly 60 years of experience helping people overcome debt and build financial confidence, we know it's possible when you have the right tools and support.

November is Financial Literacy Month in Canada, and this month we’re helping you Flip the Switch to transform your money habits. Sometimes all it takes is one insight—one lightbulb moment—to change how you see your money and inspire you to take action.

In this post, we'll walk you through proven strategies for getting a handle on your spending, building micro-habits that lead to big change, and developing the mindset you need to achieve your financial goals.

Understand Where Your Money Goes

Before you can improve your relationship with money, you need to understand where it's actually going. When you know exactly how much you're spending, you can make informed decisions about what to cut back on and where to redirect your dollars.

Begin by reviewing your bank and credit card statements from the last two to three months. Look for patterns or small expenses that you may be overlooking. Many clients we work with are often surprised by small costs that add up.

For example, you might discover you're spending far more than you realized on subscription services you barely use, impulse purchases, daily coffee runs, or takeout meals. These are what we call "money leaks"—small expenses that add up to hundreds of dollars over time.

Commit to a one-month money audit. Track every single purchase using a budgeting app, spreadsheet, or Credit Canada's free expense tracking tool. Review your findings without judgment. The goal isn't to shame yourself, but to gain clarity and identify ways you can adjust or stick to your budget. 

Once you’ve completed your money audit, you can use Credit Canada’s ABC method for sustainable spending:

• Analyze your income compared to your expenses.
• Brainstorm ways to improve your cash flow.
• Change your habits by making adjustments that help you live within your means.
  

Instead of wondering where your money went, download our free budget planner to get crystal clear on your spending. 

The 50/30/20 Rule and Beyond

Once you understand where your money goes, you need a framework for managing it. The 50/30/20 rule divides your after-tax income into three categories: 

• 50% for needs like housing, groceries, and utilities. 
• 30% for wants like entertainment and dining out.
• 20% for savings and debt payoff.

This rule works well as a starting point when you’re creating a budget, but it's not one-size-fits-all.

For example, if you want to get out of debt that have high interest rates, you might shift more money from wants to debt repayment. Or, if you live in an expensive city, your needs might take up more than 50%. The key is finding a balance that works for your situation and income.

Build Strong Financial Habits

Big financial transformations don't come from one-time windfalls. They come from small, consistent habits that you repeat over time. Micro-habits are tiny actions that take minimal effort but compound into meaningful change:

• Save small amounts regularly. Even $5 or $10 per week adds up, especially when compound interest is working in your favour.  Each dollar you save starts earning its own return, and then that return earns more in the future.
• Review your spending once a week for just 10 minutes.
• Delete saved payment information from shopping sites to curb impulse spending.
  

One proven technique is habit stacking, which pairs a new financial behaviour with something you already do automatically. For example:

• After brushing your teeth in the morning, transfer $5 to your savings account.
• When you get paid, immediately move some money into savings before you can spend it.
• Check your bank account while drinking your morning coffee.

Automating Your Financial Habits

Habits are helpful, but sometimes taking advantage of automation can jumpstart sustainable spending. 

Automated systems are your secret weapon and can make saving feel easier. Set up automatic transfers so money moves into savings or toward debt payments before you can spend it.

Manage Debt Strategically

Debt isn't inherently bad, but not all debt is created equal. 

For example, mortgages allow you to secure a place in the housing market and build equity, while student loans enable you to invest in your future. 

High-interest loans or credit cards, however, can become unmanageable and difficult to pay back. In some cases, people may use this debt to make purchases they can’t truly afford. This debt is more likely to harm your financial situation than act as a tool. 

When you're ready to tackle debt, there is more than one approach you can take:

• The snowball method: Prioritize paying off your smallest debts first, while making minimum payments on all other debts. This option helps you build momentum with quick wins that keep you motivated and may accelerate cash flow if you’re able to eliminate small debts quickly.
• The avalanche method: Tackle debts with the highest interest rates first. You can save more money on interest charges over time by prioritizing these loans. This method may benefit those with high-interest debt or credit cards.

Both methods work, so choose the option that best aligns with your current situation, including what will help keep you motivated.

If your debt feels overwhelming, it's time to get help. Our certified Credit Counsellors offer free, confidential consultations to help you understand your options, unique to your situation.

Strengthen Your Financial Mindset

Money management is often deeply emotional. Fear, guilt, shame, and stress all influence the financial decisions we make every day. The relationship between overspending and mental health is real and significant for many of our clients.

Understanding this emotional connection is key to building a healthier relationship with money.

Common emotional triggers include:

• Worrying about running out of money.
• Feeling guilty about past mistakes.
• Seeking instant gratification.
• Hiding financial struggles instead of seeking help. 
• Experiencing high stress, anxiety, or depression during daily life. 

Take time to reflect on these questions:

• What does financial security mean to me?
• What's my biggest money stressor right now?
• When do I feel most anxious about money, and what triggers that feeling?

Many people carry negative narratives, such as "I'm terrible with money" or "I'll never get out of debt." These stories become self-fulfilling prophecies. Instead, try positive reframing: "I'm learning how to save money now" or "I'm making progress, one payment at a time."

Make sure that you’re focusing on progress, not perfection. You can track and celebrate your path forward by:

• Creating a visual tracker for paying off debt.
• Document savings milestones.
• Keep a wins journal.
• Sharing your successes with a trusted friend. 

This can help you stay motivated and focus on the big picture: that you’re successfully incorporating money-saving practices into your daily routine and are working towards financial stability beyond managing debt or living paycheque-to-paycheque. 

Plan for the Future

Financial stability isn't just about managing daily expenses now, but also about preparing for tomorrow. Planning ahead means more choices for retirement, less stress when unexpected expenses arise, and greater financial independence, even if the cost of living goes up.

A solid financial plan includes three essentials:

• Emergency fund: Start with $500 to $1,000, then work toward three to six months of living expenses. This buffer protects you from going into debt when unexpected costs arise. (And good news: you can save for emergencies even if you have debt!)
• Retirement planning: The power of compound interest means starting early—even with small contributions—makes an enormous difference. If your employer offers matching contributions, take advantage of it, otherwise you’re essentially missing out on free money.
• Protection against shocks: Make sure you have adequate insurance coverage for disability, life, home, and auto to protect against potentially significant financial disasters.

Taking Control of Your Finances

Getting better with money is a journey, not a destination. You can start by: 

• Understanding where your money goes by tracking expenses and identifying money leaks.
• Building strong financial habits through micro-habits, habit stacking, and automation.
• Managing debt strategically using proven repayment methods and professional guidance.
• Strengthening your financial mindset by recognizing emotional triggers and celebrating progress.
• Planning for the future with an emergency fund, retirement savings, and insurance.

Being "better with money" is an ongoing process. Some months will go smoothly as you incorporate new money-saving tips into your habits, while others will throw you a few curveballs. What matters most is that you keep moving forward and building the financial confidence you deserve.

If you're struggling with debt or finding it hard to make ends meet, Credit Canada is here for you with judgment-free support, financial coaching, and debt solutions suited to your unique needs. We'll set you up with a free credit counselling session with one of our certified  Credit Counsellors, where we’ll assess your income, expenses, and debts together to explore solutions tailored to your situation. We’ll give you a roadmap to becoming debt-free, with no judgment—just support. 

Contact us online or call 1(800)267-2272. We're ready to help. You can also chat with our AI-powered debt management agent, Mariposa, to get personalized financial support at your own pace.