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How to Drastically Cut Expenses and Get Your Finances on Track

by:
Sandra Sherk

Your parents said this day would come. You may have even heard it from me at a high school or young adult workshop. “You may not care now, but someday soon you’ll meet the love of your life and want to get married and buy a house.” Sound familiar?  

Now, that day has come and you’re finding yourself financially unprepared. While your parents may be saying “I told you so,” I’m a glass half-full person, and I’m here to tell you that it’s never too late to take control of your finances. In fact, you can start right now.

Consider this: Using Credit Canada’s online Budget Calculator, I entered some of my own expenses and it showed me how I could save almost $200 per month.  That’s $2,400 a year, and a whopping $12,000 in just five years. But enough about me—this could be you!

Ways to Save

Now that I have your attention, let’s look at ten easy ways to reduce expenses and save money on a day-to-day basis.

  • If wedding bells and home buying are over a year away, consider moving back in with your parents—if they’ll have you! You’ll want to offer them some agreed upon monthly payment for their graciousness (and to keep you honest), but ultimately you can wind up saving up quite a bit of cash. Just be sure to save it, not spend it; you might even start your own emergency fund.
  • Lease up for renewal and refuse to retreat to your parents’ home? Consider renting a less expensive place for a year or two, or bring in a roommate to share expenses while you save up.
  • Save money and be healthier—talk about a win-win! Making your own meals instead of dining out is usually better for you and your wallet. So when you cook at home, make extra and take the leftovers to work for lunch the next day. On average, this could save you $7 a day, or about $35 per work week
  • Make grocery shopping an adventure by seeing how much you can save. It’s not too hard if you keep a list and stick to it, price match, and use coupons (no, you don’t have to clip them anymore; there are apps for that). Also, don’t go shopping when you are hungry—that leads to impulse purchases.
  • Can you give up some gigs? Take a close look at your cell phone bill and look for ways to decrease your monthly payment. And when the latest edition of your phone is released, resist the urge to buy it. It’s not going to be that different.
  • Your caffeine cravings come with a price tag. However, Tim Hortons, Starbucks, and other favorites can be bought in-store, brewed at home, and brought to work in a thermos. This can put an average of $3.25 into your savings every day!
  • Love movies? Me too. But the theater, and especially the concessions, can cost a fortune. Rather than empty your wallet and file into a crowded auditorium, stream your movies at home and pop your own popcorn.
  • Our car or truck is our independence! But, independence has a price. Consider public transportation for simple to-and-from commutes, like work. It can save you a bundle in gas and possibly maintenance.
  • Can you really tell the difference between Cocoa Pebbles and Choco-Rocks? Probably not! It’s habit to reach for the name brands we know, but buying generic or store-brand items can really make a difference in your supermarket bill.
  • One last tip to hammer home, and appropriately enough it’s about nails! Ladies, we like to pamper ourselves with manis and pedis, but DIY nail care could save you $35 or more per month. Consider having a girls’ night in and giving them to one another; you’ll also save on the cost of eating or drinking out!

Make Your Savings Count

Now that you’re saving money, it’s important to make the right choices with it to ensure you have savings—and that they add up. Here are three smart moves you can make to begin your nest egg.

  1. Open two bank accounts. You’ll use one for everyday expenses and the other strictly for savings. You can also set up an auto transfer so that every payday, a set amount is transferred from your everyday account to your savings account. That takes the money out of sight and puts it out of mind!

  2. Consider a Tax Free Savings Account (TFSA) or RRSP. You can have funds from your paycheque invested into a TFSA or RRSP which provide a higher rate of return than a regular savings account.  And remember, first time home buyers can take money from their RRSP when buying their home (the funds do need to be returned to the RRSP over a period of time).

  3. Round-up. Saving is easy when you don’t have to think about it. Some debit cards will round up your purchase amount and deposit the funds directly into your savings account. So for example, you have lunch at Harvey’s and spend $7.60; your everyday account will reflect an $8 spend while 40 cents goes into savings.

If you’re still feeling the financial burn, you aren’t alone—and Credit Canada can help. Our certified credit counsellors can help you establish a monthly spending plan that will include your savings goals to get you on the path to financial freedom. If you have debts that are holding you back, we may also be able to help you with a Debt Consolidation Plan. Take control of your future today!

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Topics: Money Management, Saving Money

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