The average Canadian has just $200 or less in savings. This startling figure was released before the COVID-19 pandemic hit, which has caused major job loss and the closure of numerous businesses.
Without an emergency fund, financial stress and worry are compounded. There is no financial cushion to fall back on in hard times; peace of mind seems impossible.
Thankfully North Bay residents can take advantage of some simple strategies in order to start rebuilding their savings. We can all get our finances back on track, and we can start today.
In times like this, when money is tight and uncertainty abounds, remember to be resourceful, creative and honour your priorities. Here are some small steps to get started.
Track every dollar
You can’t make any changes if you don’t know exactly where every dollar is going first. Tracking your spending is a remarkably instructive—and simple—exercise. Simply record every expense and purchase made every day for a week, or better yet, a month. We often lose track of smaller, less significant amounts spent, and sometimes forget to factor in ongoing sums such as those that go towards debt repayment or credit card interest. Once you have a full record of your expenses, examine each one closely and determine where you can make some changes.
Trim your spending
Even the most financially prudent among us are spending in areas that aren’t absolutely necessary. Cast a critical eye at those nice-to-have expenditures and see where you can cut back a little. You may not truly need three different subscriptions, a lawn care service or prepackaged meals. Perhaps you could take on a few more tasks around the house, rather than outsourcing and paying a premium for convenience.
Adopt a saving mentality
Now apply this new outlook to your spending on essentials. We all need groceries, haircuts and the occasional new item of clothing. How can you save in each of these categories? Is there a more budget-friendly grocery store you can shop at weekly? Can you switch your account type to save on monthly banking fees? Can you negotiate a lower rate on your credit card debt? Wherever you do have to spend regularly, find ways to save.
Declutter your physical environment
No matter how responsible we may try to be with our money, most of us have more stuff than we could ever possibly need. Now is the time to donate or sell these unused goods, such as toys, tools, small appliances, sports equipment and clothes. Give them to a local charity or second-hand store, or try earning some extra cash by selling them online, holding a garage sale or taking them to a consignment store.
Watch your savings grow
Instead of just curbing your expenses, actively save up the amounts that you would have spent elsewhere and set them aside. Take every sum saved, stash it away and watch your savings grow. Even if the amounts are modest, they do add up and it is very rewarding to see progress being made. Whether it’s in a savings account or separate emergency fund, actively adding money in will bring great satisfaction. Before you know it, you’ll have established a healthy financial habit and you may even find yourself looking for more ways to save.
Invest in your financial education
Now that you’re firmly on the right path, it’s time to invest in your own personal financial education. Learn about your credit score, bad credit loans, managing debt, debt consolidation, saving and budgeting. Free, credible online resources are a great place to start improving your financial literacy today.
“Financial literacy is disappearing from the school curriculum, and as a result, many Canadians aren’t taught the fundamentals of managing money, the importance of maintaining credit, and how to manage debt until they find themselves in financial hardship,” says Andrea Fiederer, Executive Vice President and Chief Marketing Officer, easyfinancial.
“We know that 48% of non-prime Canadians turn to online resources to learn about how to better their finances but with an overwhelming amount of information out there, it’s hard to even know where to start. With content that is tailored to each visitor’s needs, we know that through goeasy academy, Canadians can begin to learn and develop the necessary skills to successfully manage their finances and make sound financial decisions for the long term.”
Keep in mind that when changing your financial habits, it’s important to take the long view. Even if the amounts you’re able to set aside for saving seem small, they represent a big change in your thinking. You are establishing healthy financial habits and taking positive action toward a financially secure future.