Everyone loves a good deal and saving money. However, splurging on an item when it’s on sale can make us inadvertently spend money that we didn’t have. Have you ever found yourself in a frenzied situation such as Black Friday or Boxing Day, and you happen to stumble upon a fantastic deal that you can’t pass up? Looking back later, you realize you probably didn’t need the item, and perhaps couldn’t even afford it right at that moment. But because you were focusing on the discount, you may have convinced yourself that you saved money while actually adding to your overall debt.
Finding ways to save can seem like an impossible task, especially when expenses and bills never seem to end. This is where a budget helps. By identifying where your money is going you can reconsider:
- what you are spending your money on
- how much money you are spending
Next, you can re-evaluate your spending habits. Think of it like spring cleaning for your finances rather than your closet. Review your spending habits and reduce or eliminate what you don’t need. The goal is to get into the habit of saving for you want really want, then buying it with the money you have saved, rather than spending money you don’t have on impulse purchases.
Ten tips to find savings
With a solid budget in place, it’s now time to look at other ways to tuck away money for that rainy day fund, or the other fun things you may want, like a vacation. Below are 10 tips which you might find useful:
- Focus on where your money is being spent and find ways to cut back so you are reallocating some of your spending to your savings plan. For example, you may have signed up for a trial of a service then never realized you are being charged monthly for a membership you never use.
- Set a budget for necessities like groceries. Make a list of what you need and stick to the list. And don’t make the mistake of shopping when hungry, it can cloud your thinking and you’re more likely to grab extra snacks or food you didn’t need.
- Review your bills and be aware of when fees or rates increase; either renegotiate them, or consider if you still need the product/service.
- Renegotiate lower rates on car insurance, cell phone, internet, cable, your mortgage (when interest rates reduce), and credit cards.
- Ask if your employer offers a savings plan where you can allocate money from your pay. This is one of the best ways to save since it comes right out of your pay before you have the chance to spend it.
- Consider switching banks to one with no minimum fees and no transaction fees. Some even offer sign-up bonuses.
- Cut back on dining out or after-work drinks; these expenses can add up quickly. Rather than dining in or having food delivered, opt for take-out to save on tip and delivery charges.
- If you are not using something, consider selling it.
- Do not procrastinate. This can lead to spending on higher ticket items because you forgot an event or left it to the last minute. Plan ahead and shop around for things like gifts, formal wear or higher ticket items.
- Watch out for scams which could catch you off guard and cost you a lot of money. If something sounds too good to be true, do your research and take time to think it over before committing.
Finding ways to save can be easier than you think, but it requires commitment. Set your goals, then work on achieving your goals by reducing your expenses and increasing your savings. For further assistance in creating your financial goals, the Government of Canada’s financial goal calculator provides step-by-step support in helping you manage your debt and savings goals.
Written by Salina Shariff, Financial Wellness Leader at People Corporation.