Seven financial tips to start your year off on the right track
January’s credit card statement or a quick peek at your bank account can bring the holiday cheer to a sudden, sobering halt. What better reason to include financial resolutions to your list of New Year’s pledges? Below are seven ideas to get you started.
1. Set up a budget. This includes putting down on paper, or a spreadsheet, how much money you have coming in and what your expenses are. It also means tracking your expenses at the end of the month to see how you are progressing with your budget.
2. Make a plan to pay down your debt. It could take the form of consolidating your credit cards to a lower interest charging loan, switching to using cash only to avoid interest charges and maxed out plastic, or targeting your highest interest charging debt first.
3. Think of three areas where you can cut your costs. Perhaps you are in the habit of regularly eating out, frequenting your local Starbucks for your caffeine jolts, or driving to work instead of taking public transport. Think of ways to cut those costs: plan at least three dinners prepared at home or take a lunch to work, brew your own morning coffee, or sell your car in favour of a transit pass, biking or joining a car share service.
4. Avoid taxes!… legally. So-called “sin taxes” on items such as alcohol, cigarettes and junk food add up. Cutting back on these items will not only cut your taxes, but also likely lead to decreased medical expenses through better overall health.
5. Cut the cord. It’s no surprise that people are increasingly saying no to cable service. Cable TV has increased 2-3 times the inflation rate and the average Canadian family spends $53.56 a month on cable TV. Replacing your cable package with an antenna—which is free after the initial cost—and/ or a streaming service, which averages $10- $15 a month, can cut your cost to a mere fraction of most cable TV packages. Check out more ways to cut your cable costs.
6. Automate your savings. Most Canadians have good saving intentions, intending to save whatever is left at the end of the month after the bills are paid. The only problem is that impulse buys and instant gratification can sidetrack us from our good intentions. Set up your bank account so that a certain amount of money is automatically diverted from your paycheck account to a registered savings account such as a Tax-Free Savings Account (TFSA), or s Registered Retirement Savings Plan (RRSP). Taking buying temptation out of the equation makes it easier to have a consistent savings plan. You can start with as little as $25 per month.
7. Use it or lose it! Cancel unused drains on your money. Perhaps you are billed monthly for a gym membership that you haven’t used all year. While the new year is a great time to get fit, a gym membership may just be a drain on your cash if you never use it. Other possible drains may be video streaming services, cable TV, or magazine subscriptions.
For assistance with your financial resolutions through one-to-one coaching, contact Family Services at (604) 638-3390 x3166 or email email@example.com