It’s Week 2 of our 30-Day Financial Detox Challenge where we’re taking control of our spending by cutting expenses that truly weigh us down and stop us from getting ahead.
First, let’s recap how to take part in the Challenge:
- Write down a personal financial goal. It doesn’t mean you have to accomplish it in thirty days. Setting a financial goal is your motivation to save, because saving for saving sake can get old fast. It’s too easy to lose steam. You need something driving your savings—a purpose to save. It can be a vacation; adding an extra $2,000 for a down payment by the end of summer; paying off a debt, for good; or saving up for a wedding or a friend’s. Whatever it is, write it down!
- Track your spending. You need to know where your money goes to manage it properly. Look at your credit card bills, utility bills, and your debit transactions. Also track the physical cash you’re spending. If you need help tracking your spending download our free Monthly Budget Tracker.
- Write down your monthly budget. If you’ve never built a monthly budget before it can seem overwhelming. If you need help, download our free Budgeting Worksheet or book a free appointment with a real pro—one of our credit counsellors—who will build your budget for you…for free! Just call us at 1.800.267.2272.
- Cut out expenses that don’t serve your goal. You know that coffee you get every morning and that lunch you buy every day… these expenses could actually make the difference between going on vacation or not, or paying off your debt versus staying in an endless cycle of just paying the interest. Once you’ve identified all the expenses you (and your budget) could do without, get rid of them! I know that might seem harsh but just try it for thirty days. That’s what a challenge is about. You go the extra mile because you know there’s a finish line, but in the process, you build healthy money habits, which then let you spend responsibly, like a coffee two days a week or a night out once a month.
- Track your savings. This is the most important step. Seeing how much money you will save from a financial detox will help motivate you to follow through on your personal finance challenge. You need to see it to believe it.
Our Budget Calculator is a great tool to help you evaluate what expenditures you can ‘detox’ from your budget now to help you prepare for more important goals in your life, like fun and festivities. The best part is it also shows you how cutting out those expenses can add up over time.
Not sure what you’re willing to give up or what expenses to cut? That’s where our credit counsellors come in. They are amazing at sniffing out money in places you’ve never considered. They can also suggest alternatives, like taking transit and ditching the car then saving gas and parking.
And what about those unexpected costs that come up and throw us off our game?
Well my friends, the truth is that most of what we classify as “unexpected expenses” are not-so unexpected. Your car is going to need repairs; your cat is going to need to visit the vet, and you’re going to be invited to a few events, like weddings and baby showers, especially now that spring is in the air and we’re headed into wedding season. I myself am mentally clutching my wallet dearly just writing out these scenarios, especially the last one—gifts and events—can get costly fast!
According to an article in the Financial Post, in 2013 the average cost for a wedding guest was $539 per wedding. That’s a hefty amount! And we all know what usually comes after marriage… baby! That’s right. You know that wedding you spent hundreds of dollars on two years ago? Well, get ready to spend on a baby shower!
It’s safe to say we need to work our loved ones’ circle-of-life into our budgets, but how can we do that? By taking on the 30-Financial Detox Challenge and making sure we get in control of our money. Then we can focus on more important things, like celebrating with our friends and family and not worrying about how we’re going to pay for it all, or worse, be resentful towards them for making us spend money we don’t have.
Here are a couple tips that can help get you through the invites:
Know your limits and plan ahead.
We usually have a good idea of upcoming events and expenses. Chances are, the next wedding invitation you get will be inviting you to nuptials six months or so in the future. You might have even more time to prepare if you’re invited to a destination wedding. That’s a 6-month notice or more to prepare your budget for the added cost. Decide how much you can reasonably spend to attend the important events in your life and then make them a financial goal.
Know the difference between ‘needs’ and ‘wants’.
Decipher between your needs and wants to further curb your bad spending habits. Wants are for your financial goals, needs go in your budget. Do you really need to buy a new dress or suit to attend your best friend’s daughter’s wedding reception? Or will an oldie-but-a-goodie from your closet do? Do you need to chip in for a limo ride or will your regular mode of transportation get you there without really missing out? Cut costs where you can. Your money is always better off with you. For more information, check out our previous post on budgeting needs vs wants.
Think outside the box.
For most events, like showers, your invite will usually come with a registry. Reach out to others who will be attending and see if you can split the cost of a valuable gift with someone.
It’s never too late!
If you’re still recovering from last year’s season, there’s help for you yet. Did you take out a payday loan to pay for a big gift, a destination wedding, or that last minute trip to the hairdresser and nail salon? Did you put too many rounds of drinks on your credit card? If you’re still feeling the weight of those decisions fill out our free Debt Assessment. We just might be able to help you put the past in the past, as far as those decisions go. No judgement.