So, If you are reading this,that means you are already thinking about your finances.By finances I mean, you have already asked yourself questions like “Where is my money going?”;”Will I always live with this crunch?”. You better be serious as you never would come to know that when the mercury will rise and your financial status will start affecting your feeling of well-being. As a banker I have seen this happening to many singles and couples earning on both the extreme. The trap is easy-If you see $$$, you will spend it.I am not here to talk about the big dollar amounts, registered and non-registered RRSP accounts and ROI etc with those jargon rattling your mind.I believe in keeping it simple.Read on..
1. Get real -Yes, this tough but you know what is tougher? Its seeing your money disappear. Jot down all your expenses account;from Tim Horton Java cup to Walmart trips.Add every expense.It is like going on a guilt trip because you know you have over spent and somehow you just don’t want to look at it.That is OK, be nice to yourself.
2.Thats what I make– This is no guess work.You should know your after tax pay advice.And now start afresh. Just pick a pay week fresh and take that as your starting point.
3.Credit is not your money– Most people think that they have x $$$ to spend as credit.There are no free lunches.Keep Credit card only for booking travel tickets.
4.Grocery– Go with a list always and make way for one or two surprise purchases too.Not many of you must be knowing but companies pay a premium to retailers for keeping a certain product at a customers eye level.Always make sure you check the top and bottom most products as well,they are as good.Also, if you are fond of buying cosmetics and can’t control, just go for free samples that is available at most of the counters.
5.Piggy bank-Yes, and a transparent one. Any spare change that you get like pennies,cents,a dollar etc,straight away put in the transparent piggy bank.You will be surprised how that comes in handy.One of my clients saved $40 worth of coffee a week by digging in her piggy bank.Always carry that with you in car,it’s a handy purse for paying parking and coffee.Never forget to take a small portion from your paycheck, like $40-$30 biweekly for your ‘on the go’ expenses.
6.‘God only knows’ account– GOK account is just like a savings account where you put away a small fraction of your pay cheque and never look at that.I started putting $20 every pay cheque since 4 years now and ‘God only knows’ how much that account has.I have never taken out money from that account so I am sure it is helping me somewhere.
7. RRSP or TFSA – It is simple, if your company matches your RRSP contribution then start putting away some money,you can start away with as low as$50 every paycheque.If your company doesn’t match then you can open a tax free savings account, where you can put the same money away and you won’t be taxed on that particular amount. The whole idea of putting money away in RRSP or TFSA or GOK account is that, if you don’t see that money you will not miss it. Also, if your company believes in benefits then its always a good idea to exhaust all those benefits ,it’s like free money gone unnoticed.Some of the company offers discounts on some stores, tuition fees reimbursements, eco -pass for transits etc.Always rely on your HR website and before you go shopping do a little recce.This goes a long way.
8. Spoil yourself- Tight budgeting is like going on crash dieting,if you hold it too close to your heart,they may not work.So, set a time for yourself, that every 2 months or so you will spend a particular amount on yourself (say $200 if you earn from $30000 to $ 35000 for eg yearly).
9.Be At It – money will never grow on trees so you have to be at the job of visiting and revisiting your bank account every three days. Until you hit that jackpot, your only jackpot is your ‘paycheque’.
With these little things you are sure to see a positive amount howsoever little at the end of your paycheque and believe me,many people I know have saved upwards of$800 monthly by just staying mindful even at a meager salary of$20000 yearly. It’s worth a good try.
Till then stay smart, stay true to your finances and stay that way!