BY: FAZAAD BACCHUS
A very Happy and prosperous New Year to my readers and let me wish you a great 2018!
Good news! The minimum wage has gone up to $14.00 per hour and that in itself gives a little breathing space to low-income earners. If you are on minimum wage, then you can expect to earn approximately four hundred dollars more per month. It’s just about two weeks into the New Year and as usual most of us have made some type of resolutions. Keeping track of your new year’s resolutions is important if you want to achieve them. With our very busy lives, we can quickly get lost in the hustle and bustle of making the almighty dollar and paying bills.
Here are a few pointers to reduce your spending.
Stop impulse spending – these can be some of the worst decisions when it comes to spending money. It happens without careful thinking and is usually based on emotion either sad or happy. For this new year try to avoid this type of spending, it’s a “good feeling buy” but doesn’t really add value to your net worth. If you buy things you don’t need, you are not putting your money to good use.
Debit or credit card – remember that using a credit card is the same as borrowing, someone is lending you money! It’s an easy trap to use that card with the expectation that you will repay it with future income. Consider using your debit card if you can set aside a specific amount of money in your debit card each month and know that you cannot withdraw more than the remaining balance, this will keep your spending down.
Save first, spend after – by far this is one of the most difficult to achieve. What are you planning to do with the increase from the minimum wage? Don’t start spending it. Open a TFSA and it will reward you many times over in the later years. We have been taught over the years to first, list our expenses, fixed then discretionary and whatever is left over can be saved. For 2018 let’s try a different approach, that’s a save first and spend after.
Track your spending – today, tracking is so much more sophisticated, there are many budgeting programs that you can find online, however, a simple Excel spreadsheet can do the trick, if you are not computer savvy, just take a notebook and write it down. This way every month you can see how much you are spending and on what, basically where your money is going. This simple strategy will help you make adjustments where you can review and reduce either your expenses or your debts.
Work alongside a financial advisor – research has shown that more people who work with a financial advisor have more money over time than those who don’t. Sit with an advisor. Discuss your financial goals, your budget, your fears and concerns. A competent financial advisor will work out a proper financial plan for you that you can follow to help reduce your spending and increase your savings. This is an important decision to make in 2018. Find a good financial advisor and work your way towards creating wealth.