Many Canadians have a naive view of money. They spend like rock stars and do not pay attention to the debt they are building. When debt becomes unmanageable it can lead to serious issues with credit scores and can also make it impossible to buy a home, get a car loan or even lose your home. Here are some tips to help you learn to save and avoid over spending every month.
Set a Budget
First set a budget and stick to it. Look at all of your monthly expenses and how much you must spend every month. See how much money you have left over each month and even if you can only afford to put aside $20 per week, do so in a high interest no fee savings account. This will be your emergency money. You can also speak to your bank about other options such as RRSPs, GICs and even RESPs for your children’s education.
Stick to Cash
One of the best ways to keep track of your spending is to stick to cash. The more you depend on credit cards, the more debt you will build. If you need to make a major purchase and it is not an emergency, try saving towards it and then buying it once you have the money available. In theory if you can’t pay cash you actually cannot afford it.
Stop paying full price for items unless it is absolutely necessary. Look at free printable canadian coupons, read flyers and shop the clearance racks when you need clothes. You will discover that it is rarely necessary to spend money on full price items. Shopping smart will allow you to always have access to additional money to add to your savings.
Depend on Emergency Funds
Most people do not have an emergency fund. There are many situations that can arise in which emergency funds might be needed. It can be something as simple as unexpected repairs for your vehicle, or something very serious such as the loss of your job. Trying to keep as much savings available as possible will prepare you to fork out additional emergency money when you need it. If you own your home it is even more important to cover repairs and replacement of items such as appliances.
It is never too late to learn how to save money and become more financially responsible. These tips will help you get started.