This year, one of my major goals is to be financially free and responsible. For me this means, not constantly buying things on credit and achieving my savings goals (and also investing). At the start of the year, I read this article about how someone saved $23k from not buying anything and needless to say, I was really motivated
Despite accounting for my income monthly, I found that I was always paying off a credit card bill that never seemed to decrease. That said, I wasn’t able to save up as much as I wanted to last year.
Over the last few months, I have tried a number of tips and tricks that I feel are worth sharing on the blog. Enjoy!
- Accounting for your income is a great first step but are you accounting for your income properly?– In an earlier article I wrote here, I shared why I think it was important to account for your income. However, I found that accounting for my income was just not enough and I really wanted to know how much I spent on my credit card and how much I spent paying it off monthly. I added a few more columns to my spreadsheet and with this I was able to see how much I spent on the credit card.
- Research & Plan ahead– Moving, planing a trip? It is important to have an idea how much things cost before hand. For example, if you plan to travel in September, it is a good idea to know how much tickets cost by June so you have an idea of just how much it is going to cost you and you can plan accordingly.
- Budget– This goes hand in hand with planning ahead and I wish I had followed my financial budgets judiciously in the past but hey, we live and learn right? This article on building budgets that work for you helped me build a realistic budget and there’s a free template too.
- Setting monthly goals– I recently started having monthly goals so it was important for me to also include financial goals. For example, my April goals included a Saving goal and sticking to my budget. CIBC allows you to set a savings goal and track your progress. Pretty neat!
- Save, save, save! – Every opportunity you get, save! But, like I read here, it is also important to save for rainy days, traveling, events (in my case, moving) and much more. I currently have 4 savings accounts for different purposes.
- Trick yourself- I know a number of people who go out without their cards, carry cash only so they are not tempted to spend money. Personally, I have never tried this before for fear of being stranded. However, I ‘hide’ one of my bank cards so I barely ever know where it is except it is an emergency.
- Debt is good!– Ideally, this also falls under tricking yourself. Have you ever been indifferent towards buying something and in the process of talking yourself out of buying the item, you suddenly remember you owe money? This happens a lot with me. As a rule, if I owe (usually credit card) more than I am willing to pay up in a month, I usually don’t buy stuff I don’t need urgently. For example, at the end of February, I was owing over $500 on my credit card (don’t judge me) and I knew that I wasn’t going to pay it all off in March since I also wanted to save. But this discouraged me from unnecessary expenses such as getting my nails done, or random outings in March.
- Every penny counts– Oh, the power of 99cents. Once I got to understand that the ‘two dollar’ croissants and coffees quickly add up to $100, it was a lot easier to walk away from the coffee line if I wasn’t in desperate need.
- Be realistic– I attempted the save $500 a month challenge from here but as time went on, I figured that because I was working part time, going to school and had a credit card debt, it wasn’t feasible. I ended up saving $300. What works for me might not work for you. Find what works for you!
- Visit Investment Conversations- Ha, this blog is a lifesaver! Almost all the links in this post are from Investment conversations. Told you it was a lifesaver. This is a blog for millennials so it is easy to relate to.
I am still far from being financially responsible but I have made a lot of progress over the last few months. I hope you have enjoyed this post and learnt a thing or two.
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