Two years ago, Martin didn’t give much thought to his bank accounts. Working in information technology and contracted by a major oil company, at 27 years old his spending wasn’t a problem. It wasn’t that he didn’t save (he did contribute to a Tax-Free Savings Account), but going out for dinner a few nights a week, splurging on the latest video games and taking a couple of vacations a year weren’t something he concerned himself with. There was always money left over.
Today, it’s a bit of a different story. With the economy impacting virtually every local sector, his overtime hours were cut off. He is still fortunate to have steady employment, but the paycheque isn’t quite what it was 18 months ago.
It’s a transition, but Martin simply couldn’t sustain the lifestyle he had been accustomed to given the difference in income. After speaking with a financial expert, he realized a few small changes went a long way.
1. Find money you don’t know you have
Try cutting unnecessary costs from your budget first. You might be surprised at how quickly all those little extra fees add up. Likewise, think about services you’re currently paying for and then not using. Magazine/newspaper subscriptions and gym memberships are common culprits. You can find alternative solutions like going outside for a run to get your cardio and cutting out the membership altogether if you want. Only pay for what you will use.
Interest charges for late bill payments, parking tickets and overage fees on your cellphone are all discretionary purchases that are easier to avoid. Same thing for paying surcharges at non-credit union ATMs or exceeding a monthly transaction cap on one of your accounts. Synergy also offers the SmartPack account pack that automatically moves so you pay for only what you use.
2. Get creative
Being budget conscious doesn’t have to mean becoming a social hermit. Instead of doing a fancy dinner with friends, you could opt for casual coffee and dessert instead. Or take a cue from your grandmother and invite friends over for a potluck.
If you’re really craving a night away from the kitchen, put limits on the amount you spend on eating out. Don’t forget that alcohol is notoriously overpriced at restaurants; stick with water and you’ll have more money left in your wallet. Or stock up on cheaper options to put in your freezer when you just don’t feel like preparing a meal – frozen pizza on sale is a lot cheaper than heading out on the town.
3. Be Free
Did you know your local library stocks movies and TV series DVDs? Why buy them when you can get them for free? Additionally, you can save on long distance minutes by calling faraway friends and family using computer-to-computer calling services such as Skype.
4. Have some patience
Maybe you really feel that you need The X-Files boxset that just went on special while you were surfing an online shopping website. Give yourself 48 hours before you’re allowed to click and see if Mulder and Scully’s adventures still seem like a “must have.”
5. Combine your bills
Having separate bills come in each month for landline, cellphone, Internet and television can be a bit of a hassle. It can also be costing you more. Do some research and many providers will have discounts if you bundle together a number of services with them - with reduced costs each month.
Those small savings add up. Martin was able to make small adjustments in his life and still was able to enjoy most of the things he always did before without going into overdraft. Plus, after further discussions with his financial planner, he has started putting money into mutual funds* and has begun planning for retirement.
But maybe most importantly, with his personal money stress taken care of, he is able to do the things he wants to do, like spending time with friends and family, without that weight on his mind.
Contact us, we can help you set up a budget that meets your savings needs and helps you have some fun at the same time.