New Year’s is a time for resolutions. Some are made and many are broken. Personally, I think this happens because we try too hard to overhaul certain behaviours.
That’s why I propose a financial New Year’s resolution that’s easy enough to commit to and yet effective enough to work.
Essentially, my suggestion is to put the following six tips into place.
5 top tips for saving money year-round
1. Have a tangible goal.
David Weliver, from Money Under 30, suggests that you aim for what he calls “weeks of freedom”. For instance, let’s say you want to take a year off work to go travelling. That means your goal is “52 weeks of freedom”.
To accomplish this, simply estimate how much money you need to take a year off from work then divide that by 52 weeks. In other words, think of savings as “weeks of freedom” and set goals to them.
2. Reward yourself.
Don’t deny yourself life’s simple pleasures. Instead, take a balanced approach.
For instance, I love fine wine and I get to enjoy them by not letting Terry convince me that we need a new car (though it’s eight years old!).
Another strategy is to cut back on your indulgences without fully cutting them out.
3. Make a conscious choice.
Before you decide that you need that new television or iPhone, imagine someone offering you the choice between your purchase and the money it would take to buy it.
If you choose the money, then just keep it and don’t spend it. Your purchase is not worth the cost.
4. Spend money where you spend time.
A great way to prioritize spending money is to focus on areas where you spend the most of your time.
For instance, if you spend a lot of time at your computer, then invest in a good chair. If you spend a lot of time in your car, then invest in comfort and safety versus appearance.
5. Credit card cover.
Instead of cutting up your much-loved credit card, I suggest you take out the scissors and scotch tape then craft yourself a credit card sleeve.
Doing so creates just enough of a barrier to delay an impulse purchase. You can even add a message like “oh no you don’t”.
One bonus tip
My final suggestion is to invest in RRSPs. Every dollar that goes toward an RRSP contribution reduces your taxable income. As such, you save money by spending less on taxes.
I bring this up now because the deadline for making your contribution is March 2nd.
If you’d like, you can call us today (while you’re in the mindset of saving!) and we’ll defer the payment until then.
Happy New Year everyone and let’s celebrate financial good health!