It’s All About Control: Money Management For The Everyman

Here is your one and only tip for saving money. Spend less than what you have coming in.

Easy. You’re welcome!

Oh…. that wasn’t very helpful. Okay. Let me try again.

Originally, I did not have the greatest of spending habits. Years ago when I was in high school I spent and wasted my income on frivolous items. I kick myself as an adult looking back. Now, although I am much better I, similar to many average Canadians struggle with the urge to buy items just because, there is no reason. Perhaps the item was on sale, maybe I’ve decided to take up a new hobby, or maybe I have an older model of some device and really really want the newer one. It’s this indescribable thing (consumerism) that sometimes takes over and I quickly find my browsing history filled with products I don’t need.

Here are some tricks that I use in order to help manage my money better.

1. Have a budget. 

Figure out how much money you have coming in a month. Once that is done, calculate what expenses you have going out monthly. These will be items that one needs in order to survive,

1) Rent/Mortgage
2) Utilities (heat, hydro, water)
3) Food
4) Insurance

Any excess can be categorized in to a number of areas; savings, entertainment, or retirement. There, now you have a budget!

2. Avoid the urge to spend, spend, spend. 

Many of us have been taught from a very young age that buying things makes you ‘feel‘ good and that we ‘need‘ things. It just is not true. Let’s look at what one truly needs at a basic level; a roof over your head, food in your stomach, hydro and running water would be nice, and if need be, transportation to get to and from work. It’s hard, trust me, but fight that urge to spend and it will save you A LOT of cash.

3. Do not use a credit card or a loan like it is your own money. 

Credit cards incur large amounts of interest and are the worst option to use as a money saving crutch as you can end up owing far more than the item cost in the first place. If you are struggling financially this will only hurt your situation more. Remember that this is in no way your money. If you are struggling with paying bills, cannot pay for the item outright, or can not pay the credit card off before the due date, do not buy the item.

A similar lesson and one that is important for students concerns OSAP (Ontario Student Assistance Program), or any student loan service. OSAP is also NOT free money. Eventually you will have to pay it back. Yes, OSAP has much much better interest rates than credit cards or student loans through the bank but it is also not your money. If your finances are in dire straights, stop thinking that owing money or paying back money is a future concern rather than a present worry.

Whatever you do the key is to ‘think smart’ about your money and how you spend it. Always stop, rationalize what items you are purchasing and why, and track where your money is going. I use my Google Calendar to track large payments so I know when I paid that bill, how much it was, and how often this cost comes up. This comes in handy for me when tracking gas and grocery costs.

If managing your money still feels overwhelming I would suggest two things:

1) Educate yourself. There are plenty of sites (google can be your best friend) that give simple money management advice and explain different investment options.
2) Walk/bus/drive yourself down to your bank and talk to a financial adviser.

It’s hard enough in this rat race we call life and money matters are a very big part of it.

Best of luck!

I know you’ve got this.

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