As of 2022, Canadians have over 2.3 trillion dollars in debt. Even divided up between 40 million people, that debt can be a major issue if you’re trying to build up a nest egg.
So, how do you pay off your existing debt and start managing your money the right way? We can help.
Let’s go through our top money management strategies.
Create a Budget
You should start off by learning how to budget. Determine your total monthly income, including salary, wages, freelance earnings, side hustles, and any other sources of income. Consider your after-tax income to have an accurate picture of what you can allocate towards expenses.
Categorize your expenses into fixed expenses and variable expenses (ones that change from month to month). Allocate a specific amount to each grouping and stick to it.
Keep track of your expenses regularly. Use an app on your phone, a spreadsheet, or a notebook to keep a record of your expenses. Then compare them against the amount you have budgeted. This will help you stay accountable and adjust your budget to your needs.
Set Realistic Goals
Determine your short-term and long-term personal finance goals. This will help you figure out just how much you should be putting away, and what lifestyle changes you might have to make.
Figure out what matters most to you financially. Whether it’s paying off your debt, buying a home, building an emergency fund, or saving for your future retirement, prioritize your goals based on your values and circumstances.
Be realistic about the timeframe in which you want to achieve your goals. Avoid setting overly ambitious deadlines that may be difficult to meet. Instead, set a timeline that is challenging yet achievable.
For example, you might be looking to eliminate your debt. That’s an admirable goal, but it can take more time than you think. Emergencies happen, and you might need a helping hand. In that case, you might be in need of a no credit check loan.
Reduce Your Expenses
You should look for ways to spend less money on an everyday basis. Go through your recurring bills such as utilities, internet, cable, and insurance. Look for opportunities to reduce costs by negotiating with providers, switching to cheaper plans, or eliminating unnecessary services.
Look for coupons, discount codes, and loyalty programs to save some cash. Use apps and websites that provide coupons and track sales to find the best deals.
Treat saving money as a priority by automating it. Set up recurring transfers to a dedicated savings account or investment account. This way, you save a portion of your income before you can spend it.
Contact your service companies, like internet, cable, or insurance. Negotiate for better rates or discounts. Explore competitor offers to leverage better deals.
Plan your meals in advance. Make a list when you’re shopping to avoid impulse buying. Cook at home more often. Pack your lunch for work. Reduce food waste by using leftovers creatively. Always properly store perishable items to avoid wasting food.
Review your banking fees and consider switching to a bank or credit union that offers lower or no fees. Be mindful of ATM fees. Try to use your bank’s ATM network to avoid additional charges.
Make More Money
The more money you have, the easier it will be to manage it. Look for ways to generate more income.
If you’re currently employed, evaluate your performance and gather evidence of your contributions to the company. Schedule a meeting with your supervisor to discuss the possibility of a salary increase based on your accomplishments and the value you bring to the organization.
Express your interest in advancing within your company. Take on additional responsibilities that showcase your skills and potential.
Seek out opportunities for growth and professional development. This will help you position yourself for a promotion.
Stay informed about job market trends. Actively search for higher-paying job openings in your field.
Polish your resume, optimize your LinkedIn profile, and network with professionals in your industry. This will all help increase your chances of landing a better-paying position.
You can look for ways to make more money on the side, too. If you have a talent or passion that can be turned into a source of income, explore opportunities to monetize it.
For example, if you’re skilled at crafts, painting, writing, or playing an instrument, consider selling your creations or offering lessons.
Launch an online business, such as an e-commerce store, digital product sales, or offering online services. With the right marketing and strategy, an online business can generate income and potentially grow over time.
Be Mindful of Your Financial Habits
There are certain financial habits you might have accidentally picked up without even thinking of them. You need to be intentional about your spending.
Before making a purchase, take a pause. Ask yourself if it aligns with your financial aims. Consider whether it’s a need or a want. Think about whether there are alternative options or cheaper choices available.
Practice gratitude and focus on what you already have instead of constantly striving for more. Develop a mindset of contentment.
Avoid comparing yourself to others based on what you own. This will help you avoid spending money you don’t really have.
Engage with people who have good financial habits and share similar financial goals. Surrounding yourself with positive influences can motivate you to make better financial choices.
Celebrate your money-related achievements along the way. Whether it’s paying off debt, reaching a savings goal, or sticking to your budget, celebrate your milestones. This will help you stay motivated and reinforce positive financial habits.
Money Management: Start Today
Hopefully, these top money management strategies will get you on the right financial path. It may take a little bit of getting used to, but eventually, you’ll be on your way to your goals!
Do you need a loan to get yourself back on your feet? We can help. Contact Eastern Loans today for easy and fast online loans in Canada.