Personal Finance Tips For Canadians

Personal finance tips are a highly welcomed commodity with layoffs and furloughs in effect. Do you live a busy life? I know the feeling. When you’re relaxing on the couch at the end of a busy workweek, the last thing you want to do is balance your cheque book.

In the first part of this article, we’ll look at some personal finance tips if you’re lazy. We’ll let you know how you can stay updated, make bill payments painless and use technology to your benefit.

One of the side effects of being lazy with your personal finances is going into debt. In the second part we’ll look at how to avoid getting into debt. This all starts with stopping the debt cycle before it begins, using credit wisely and not forgetting to save.

Personal Finance Tips if You’re Lazy

Stay Updated

What are the outstanding balances on all of your credit cards? Do you know the interest rate on your unsecured line of credit? If you’re unsure about any of these details, go find them out right now. Commit to checking your online accounts on a regularly basis.

“It’s even more challenging to get out of debt if you don’t know where you currently are,” says Brenda Hiscock, Certified Financial Planner at Objective Financial Partners. “Your debt problems aren’t going to go away by ignoring them.”

Here’s another question to ask yourself. When is the last time you reviewed your credit score? You’re entitled to a free credit report each year, so take advantage of it. Add a reminder to your online calendar to request your free credit report.

Once you get the reminder, request your credit report and stay on top of your finances.

Make Bill Payment Painless

While you don’t have to automate your bill payment, it sure makes life a lot easier. While it’s probably not a good idea to sign up for auto bill payment for infrequent bills you may not remember, for regular monthly bills like your cell phone, auto insurance and utilities, auto payment is a real time saver.

You’ll no longer have to worry about late fees (just make sure there’s enough money in your chequing account) or the hassle of looking for passwords for online accounts.

Use Technology to Your Benefit

Instead of budgeting on your own, use technology to your benefit. Adding up your income and expenses takes time and can lead to errors. Save the time and headache by using budgeting apps. There are a slew of great budgeting apps out there to choose from.

You don’t have to pay for an app either. Budgeting apps like Mint and Wally are free apps that make budgeting a breeze. Sync up the budgeting app of your choice with your bank account for an even more seamless experience.

Bundle and Save

Try to bundle services whenever possible. When you do, it usually helps lower your bill and turns multiple bills into just one. You’ll save money and have fewer bill payments to deal with. (Most companies offer you a discount when bundling related services together.)

Common services you can bundle include insurance (auto, home and life), cable, internet and phone; online streaming services and banking services.

Let Your Savings Take Care of Itself

A common personal finance tip is to open a savings account. Opening a savings account is the easy part. Actually using it to save money is the more challenging part.

“You can make the process of saving money a lot easier by automating your savings,” says Hiscock.

You can do that by setting up regular direct deposits to your savings account from your chequing account. But that’s only the beginning.

Sure, having a savings account is helpful, but it’s even more helpful if you have separate savings accounts for each saving purpose. For example, you could have a savings account for personal spending, emergency savings, vacation fund, etc.

Once these separate savings accounts are open, set it up so that a preset amount of money from each paycheque is deposited into each of the accounts. Look for free accounts, so you’re not dinged with unnecessary bank fees.

How to Avoid Getting Into Debt

Stop the Debt Cycle Before it Begins

The issue with using debt to pay your bills is that most people justify it by saying it’s only this once or that you’ll catch up later. Unfortunately, for many that doesn’t happen. This may be just the beginning of a debt cycle, when you start to lose control of your finances and your intentions are lost.

Besides adding to your debt load on a monthly basis, you’re only making yourself feel more helpless with each passing month. The simplest way to avoid this is to stop the problem before it even begins.

“Living pay cheque to pay cheque is a slippery slope and usually doesn’t have a happy ending,” says Hiscock.

Use Credit Wisely

Just because you qualify for a shiny new credit card, it doesn’t mean you should sign up for it. Retailers often offer us money off our next purchase as a way to get us to sign up for a new credit card we may not need.

While it may be a good idea to have a credit card for emergency purposes (assuming you’re able to pay off the balance in full each and every month), it’s equally important to adhere to a cash lifestyle. That means using credit wisely and avoiding debt in the first place.

When You’re Not Earning Enough

A common piece of advice in the personal finance world is to live within your means. However, what if you’re living a modest lifestyle and you’re still spending more than you make?

“Sometimes in order to stop the debt cycle, it may mean some drastic changes to your lifestyle,” says Hiscock.

Review all of your recurring monthly expenses and look for ways to save. Are you spending too much on rent? Consider moving to a more affordable apartment or get a roommate.

Are you spending too much on food? Change your diet and your shopping habits.

Are you spending too much on your car? Sell it and take public transit or cycle to work.

In all of these scenarios, use the extra money you’re saving to pay down debt.

Avoid High-Interest Debt

Avoid pay day loans at all costs. Pay day loans use the stress and guilt you have from not being able to provide for your family. While pay day loans may be a temporary solution, they aren’t a long-term solution by any means.

The high interest rate of a pay day loans means that you’ll be paying a lot of interest out of pocket. More often than not, pay day loans do more harm than good, so it’s best to avoid them altogether. Find another solution instead.

Don’t Forget to Save Money

Even if you’re in debt, it’s still important to save money. Just getting into the habit of saving money can go a long way. Include a category in your budget for saving money.

It may seem like you don’t have any extra money, but remember that every little extra helps. That way when you don’t have enough money to make your bill payments, you can use your savings instead of going into debt.

Are these personal finance tips enough to get your head above water? If not, speak to a trained credit counsellor today to learn more.


Reviewed by :
Benjamin Allen Consolidated Credit Canada
Benjamin Allen [email protected]

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