Over the last 12 months, how we spend our money and use our credit has changed a lot. Everyone needs a little financial inspiration to be able to save wherever they can. To help you out, we’ve compiled a list of 10 useful money saving tactics!
What is the 30-day rule?
The 30-day rule is a temporary rule that can help you readjust your spending habits. If you see something you like in a store, according to this rule you should wait 30 days before you buy it to see if you still want it after this waiting period.
If you no longer want to buy this product or service, the money should go to your savings account. This helps you avoid making unnecessary or impulsive purchases.
How does the 50 20 30 budget rule work?
Senator Elizabeth Warren published the 50/20/30 budget rule in her book All your Worth: the Ultimate Lifetime Money Plan. The fundamental rule of thumb is to divide and spend after-tax income:
- The rule states that you should spend 50% of your after-tax revenues on what you need to spend on needs and obligations.
- The remaining half should be split between 20% debt and savings and 30% of what you would like.
- The rule is a template designed to help people manage their money and credit for emergencies and pensions.
10 Best Money Saving Tips
1. Keep track of your expenses
To begin saving money and credit, you must first determine how much you spend. Keep track of all your expenses, including coffee, grocery shopping, and cash tips. Managing personal finance is an easy-saving tip that can save you a lot of money in the long run!
Once you have gathered your information, sort it into categories like petrol, food, and mortgage payments, and add up the totals. Check your credit card and bank statements to make sure you are not missing anything.
Tracking your expenses will help you determine how much you can spend per month and it will also help you identify areas of improvement. You may realize you are spending more than you perhaps should on things you don’t need – or spending more on things that can be cheaper!
2. Focus on your debt
If you are trying to save money by budgeting but still have a lot of debt, then you should focus on the debt first or it will continue to eat away at your funds. When you are no longer paying interest on your mortgage, you can quickly put the money into savings. A personal line of credit is one way to consolidate debt and make it easier to pay it off.
3. Set Savings Objectives
Visualizing what you are saving for is one of the most effective ways to save money. Want to purchase a house with a 20% down payment in three years? You now have a goal in mind and know how much money you will need to save per month to reach it. To achieve your target, create spreadsheets and calculate how much you will need to save each month!
4. Less is More
Budgeting can be very difficult if you have a large amount of money that is meant to last a while. Budgeting $2400 over 3 months is difficult but managing $800 per month is a lot easier.
Use a savings account as a holding cell and calculate how much money and credit you need per month and then transfer this to your main account. Working on a month-by-month basis with a lower amount of money will help you reduce unnecessary purchases and save more. You can even automate this by setting up a monthly automatic transfer from your savings account to your main account.
5. Save on utility costs
Request an energy audit from your utility provider or find a certified contractor that can perform a whole-home energy efficiency assessment. It may be as simple as sealing windows and doors, or as complex as installing new insulation and high-efficiency appliances.
Lowering your water heater’s thermostat by just 10 degrees will save you 3-5 percent on energy costs. Compared to a traditional storage tank water heater, installing an on-demand or tankless water heater can save you up to 30% on energy bills. This is a long-term solution but you could save tens of thousands of dollars in utility costs in 5-10-15 years.
6. Re-evaluate your cell phone plan
You might be able to save money by switching your plan if you are incurring overage fees or are paying for more data than you want or need. Examine your provider’s plans and choose the one that better suits your budget. There are many packages, providers, and companies that you can take advantage of. This could help you save $40 a month which could be put towards utilities, necessities, or into savings.
7. Analyze your lifestyle habits
Whilst re-evaluating your cell phone contract, it may be a good time to re-evaluate some other contracts and subscriptions in your life. Are you spending hundreds of dollars a year on cable, Netflix, Hulu, Amazon Prime, YouTube, Spotify, and other streaming services? It may be time to think about if you truly need all of these services.
Similarly, if you go out to the restaurant or bar several times a week or order take out, it may be a great idea to limit it to a few times a week and to have a monthly budget directed towards eating out.
8. Meal Plan
Food, ironically, is one of the largest factors that can eat away at your ability to save money. The cost of takeaways, overspending on shopping, and the numerous trips to the convenient store can quickly add up! Planning out your week’s breakfast, lunch, and dinners will help you stay focused when doing your weekly shopping while also taking advantage of saving deals at the grocery store.
9. Self-Regulate
The largest obstacle to saving money is yourself. It’s very easy to go out and spend on payday. If you are someone who buys random things, overspends, and is perhaps a little too liberal with money, you should try to implement ways to stop yourself from spending.
Obviously as said, meal and spending planning is a great way to do so but a mindful activity like the 30-day rule is the 10-second rule.
The 10-second rule states that before making any transaction, consider for 10 seconds why you should not. Ask yourself:
- Is it necessary?
- Do you already own something similar?
- Is it possible to borrow this?
- Could this money be used for something better?
10. Transport
Transport can be very costly, but there are many ways you can use transport to your advantage to save some money:
- Make sure your car’s tires are properly inflated. Underinflated tires create more friction with the road, resulting in faster tire wear and lower fuel efficiency. Check your tire pressure once a month and fill them to the highest recommended pressure.
- Get a bike. A bicycle is a quick and convenient way to get around.
- Take advantage of public transit. If you live in a city, taking public transit will save you a lot of money on gas, car wear, and parking.
- Walk. Consider walking instead of driving if your destination is just a kilometer or two away.
- Carpool. If you drive to work (or another location) on a regular basis, see if there are others that do the same thing at the same time. If you can ride-share twice a week, you will save 20% on your car wear and fuel costs per week.
Where is the best place to save your money?
Savings Account
A standard savings account in Canada is a simple and easy way to create a holding cell for your money. There are a few different savings accounts you can get in Canada but the main two are Fixed-Rate and Variable Rate.
Tax-Free Savings Account
In Canada, investing your money in a Tax-Free Savings Account (TFSA) is a good way to save money in the long term run. A TFSA allows you to put money into qualifying assets and watch it grow tax-free over the course of your life. In a TFSA, interest, dividends, and capital gains are tax-free for life. Your TFSA funds can be withdrawn at any time and for any reason, and all withdrawals are tax-free.
Need help getting out of debt and saving for the future?
This article gives you a glimpse of how to save money. However, these tips work better for some people than others. If you are concerned about your financial situation and wish to know more about saving money then don’t hesitate to contact a licensed insolvency trustee.
Groupe Serpone puts the following services at your disposal: