There’s a common misconception about money that I’d like to clear up: To be financially successful you have to be a math whiz. While it’s helpful to know basic skills, like balancing your cheque book, it’s our “money behaviour” that’s key to our financial success. And how we treat our money is largely based on our money habits.
We all have good money habits, such as paying our bills on time, and not-so-good habits like overspending on gifts. Achieving financial goals, such as buying a home and burning your mortgage, is a lot easier when your good money habits outweigh the bad. The good news is you don’t have to give up the things you love, like your Starbucks coffee and your iPhone. There are simple ways to save money without lowering your standard of living, and it all starts with a budget.
Budgeting and Tracking Your Spending
A budget is a good way to see where your money is going, but it’s also important to track your spending. Now, you don’t have to track your spending to the penny. Focus on two to three spending categories you’re most likely to overspend on, such as clothing, electronics and restaurants. For example, if you’re in the habit of going out to lunch every weekday, spending $10 a day may not seem like a lot, but when you realize that you’re spending $200 a month, you may reconsider your money habit. Perhaps instead of going out to lunch every single day, you can cut back to two to three times a week, saving yourself $100 a month. By tracking your spending you can find new ways to save.
3 Ways to Save Big
- Books, Blu-rays, digital movies and TV: When was the last time you read a book or watched a movie more than once? Save yourself some money and use the public library. Most libraries in big cities have an excellent selection of books, e-books, movies and TV shows. And if you don’t have cable, nothing beats Netflix.
- Premium cable packages: Do you really need 500-plus channels? Consider downgrading to basic cable or cut the cord altogether. Netflix and antennas are great cable alternatives.
- Ready meals and prepared food: If you’re a foodie it might be hard to imagine giving up your favourite dishes. Guess what… You don’t have to! You just have to be willing to find thrifty alternatives. For example, instead of picking up ready-made dishes like pasta, lasagna, and side dishes at the supermarket and paying top dollar, consider taking cooking classes and learn to prepare them yourself (if you don’t already know how). Weekdays can be hectic, so prepare your culinary masterpieces on weekends when you have more time.
Sean Cooper is an in-demand personal finance journalist, speaker and money coach. He’s the author of Burn Your Mortgage, available for pre-order on Amazon and in bookstores March 1, 2017.
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