Good budgeting can improve happiness, according to Greater Good Magazine. But a recent study found that too many Canadians have got bad financial habits. 21% admit to only paying the minimum on their credit card, while 11% say they’ve borrowed more cash than they can afford to pay back. So, now is the time to get a hold of your spending habits and budget better for the things you really want in life.
Regularly review your budget
Just 47% of Canadians currently use a budget to manage their spending. The key to good budgeting is sitting down, reviewing your finances, and setting money aside for specific things, such as bills, loans, personal spending, and savings. You can’t ignore your budget once you’ve created it, though. The cost of living is continually going up, so you should review your budget every month, to ensure that it’s still suitable. By doing regular reviews, you can make small tweaks as and when needed rather than face the shock of a big financial issue one year down the line.
43% of Canadians say they have concerns about the amount of debt they have. Moving forwards, pledge not to borrow cash to pay for things you don’t really need and focus on paying off what you owe instead. To make things easier, think about consolidating your debts as you’ll only have to worry about paying back one figure. Most banks and lenders will allow you to do this but look for an institution that’s upfront about its costs. You should be offered the best rates possible, regardless of whether you’re a new or existing customer. If consolidating doesn’t appeal to you, it’s a good idea to put money towards your debts more frequently than you currently do. This works particularly well for people who are paid multiple times per month. Another good way to get on top of your debt is to use the snowball method. The snowball method involves paying off your smallest debt first, then moving on to the next smallest, and so on.
Make money from what you already have
83% of Canadians own a vehicle. But Driving reports that they are only used 4% of the time. Rate Hub estimates that the cost of owning a vehicle is just short of $1,000 per month, which is a lot of cash for something you hardly ever use. Think about whether you really need your vehicle, or if you’d be better off selling it and using the $1,000 per month you’d save on more exciting things. You can still save cash with your car if you decide to keep it. It’s possible to rent it out to other drivers when it’s not in use, allowing you to make an extra income with very little effort. You may have other things in your home you can rent out, too, such as a spare room, wedding attire, storage space, and children’s toys.
Simple ways to budget better include automating your cash, cutting your costs, and ditching credit cards. Team these tips up with the tricks above and your budget will be a whole lot healthier.