While some of us may spend January at the gym (or pretending to be at the gym…or thinking about going to the gym), really the first month of the year should be spent resting…resting our weary credit cards, that is!
The holiday season can be an expensive one, and with the new year underway what better time to turn our attention to building better spending habits for the new year? Here is a 30-day plan to better finances from Heidi Blondin Financial and Manulife Investments. If you have questions, comments, or ideas, get in touch and we would be happy to chat!
Days 1 – 3: What do you want to achieve this year? Kick off the New Year right with our 30 day financial challenge. We have put together a collection of tasked to help you get your financial house in order and help you set your goals for 2020. Establishing goals is an important first step to help you map out a plan and help you focus on your priorities. Do you want to crush debt, plan for a family vacation or romantic weekend away? Today we want you to identify some short term and longer term goals for yourself. This is a great way to set yourself up for success.
Day 3 – 7 Do you know how much your family spends in a week? What’s your monthly grocery bill?
If you have a dream vacation or other saving goal in 2020, these are important questions! So, take this first week of the new year to try tracking your spending. Keep your receipts or try using an app to track your spending.
And, most importantly, find a picture that represents your goal and plaster it everywhere. On your nightstand, at the office, on the fridge–anyplace where you will see it regularly. Visual reminders of your goals can help you stay focused on making them happen.
Day 8 – 9: Now it’s time to find areas where you can save, especially as we come out of the holiday season. Does anything stand out to you? While it’s important to enjoy your money, you might see some ways to get a similar enjoyment while spending less!
For instance, a pot of coffee can be cheaper than a Keurig pod or daily Tim’s visit. If your kids didn’t get the books or games they wanted for Christmas, why not see if they’re available at the library? Renting tools is another great way to avoid excess clutter, particularly if it’s not a tool you will regularly use.
Day 10: You see the news articles every year. “Why Are Cell Phone Plans So Expensive In Canada?”…“Canadians pay some of the highest wireless prices in the world”…According to a recent article in The Post Millennial, some Canadians are going as far as having American friends and relatives sign them up for cheaper American cell plans!
Most Canadian cellphone providers offer usage statistics on their website so you can get a clear sense of what you’re paying for and not using. For instance, a 2019 Global News article found the average Canadian uses 2 GB of data.
Many discount brands have also popped up in recent years. Cell phone plans are one area where it pays to shop around! Have you explored your options lately?
Day 11: Was there something you were expecting in your stocking that didn’t show up? Or a new outfit that caught your eye at the store?
One of the best ways to defeat impulse purchases is to hit that ‘wish list’ button instead of the check out. In other words, save the item–whether in an online wish list or a photo on your phone–and see if you’re still thinking or talking about it two days from now. This is a great way to cut down on unnecessary purchases. Works with kids too!
Day 12: Did you consider your banking fees as one area you could save?
A 2017 article from VICE reported that the average Canadian pays $220 in banking fees a year. That’s the price of a big grocery run, or four oil changes!
If you would rather keep that money in your pocket, we have good news. You can sign up online for Manulife All-in Banking in about five minutes and, if you save $100 or more each month, you’ll receive free banking services!
Day 13: About 46 percent of the world’s population lives on less than $5.50 USD a day, according to 2018 numbers from the World Bank. Most of us probably have that in our pocket or our couches right now. You’d be hard pressed to buy lunch for that much at a fast food place!
For today’s challenge, try and spend less than $10 today. Challenge those around you to do the same and compare your results. Put all that money you would have spent towards your financial goal!
And if you want to share your lunch photos, you can go right ahead. Just for today!
Day 14: We have talked about your expenses and debts. What about your income? Have you considered ways to bring in more cash this year?
Keep in mind: time with the people you love and doing things you enjoy is worth something too. Your goal is not to sell every waking minute that you’re not in the office for the almighty dollar. You may complete this challenge and decide the amount of work you do in a day is plenty, and that is fine. The important thing is asking the question.
So, what are some ways you could make a few extra dollars? Some people start by decluttering the house by listing unwanted or unused possessions on a classifieds board. Others try to rent out their equipment or space–even a bit of room in a garage or basement can be valuable to someone else (so long as doing so follows the rules set by local city bylaws and by your property owner or manager, if applicable).
You may also hire yourself out if you have useful skills. Some of us may prefer more structure by becoming a sales representative through a multilevel marketing company, while others may try signing up for a freelance job board or service.
Day 15 – 16: The average Canadian lives 82 years. Yet it seems like some of us never learned the phrase ‘you can’t take it with you.’
As a whole, Canadian household debt is $2.16 trillion–that’s $57,462 for every man, woman, and child in our country. To keep up with that much spending, some families would need a third-full time job!
So, yes, day 14 of our challenge looks at that ugly, four letter word–debt. Add it all up–student loans, car loans, mortgage debt, credit card balances–and figure out which debt is the most ‘expensive’ (in other words, which has the highest interest rate).
What can you do to accelerate your debt reduction?
Day 17: Today’s action item is to get a free copy of your credit report from TransUnion, www.transunion.ca, or Equifax, www.equifax.ca. Make sure everything they have in your file is accurate. Making sure your credit score is accurate can affect your cost to borrow money.
Checking your own credit report does not hurt your credit score but not checking it can cost you thousands. Don’t wait!
Day 18: Have you ever stopped to read your paycheque? It can be dizzying, particularly at public sector employers. You’ve got deductions from taxes to union dues to health plans to pensions…
This is a good opportunity to explore whether you could be contributing more to your workplace pension or take advantage of any matching programs. When the money never hits your account to begin with, it is much easier to be responsible with your savings!
Day 19: The new year is a good opportunity to ensure your beneficiaries are up to date and make sure your benefits meet your current needs.
Did you decline family coverage and now you have kids to worry about? Perhaps you declined critical injury coverage and now you’re rethinking that decision? Make sure you meet with your workplace benefits advisor and Financial Advisor to understand your options.
Day 20: Here’s a good opportunity for a check-in, whether to give yourself a pat on the back or spur yourself on to even greater success over the next 10 days.
What purchases did you reconsider? Where did you find unexpected savings? Were there any surprises? We’d love to hear how you’re doing!
Day 21: If you haven’t already begun, this is a good time to start gathering your receipts, tax returns, and other key financial documents (including T4s, once available).
Have you started thinking about whether you will receive a return or whether you will owe money to the government this year? If you owe, how will you pay for it? If you expect to receive a return, how will you use it to live better in 2020?
Day 22: Challenges like these are a great way to give your savings and financial literacy a short-term boost. To stay motivated and challenged throughout the year, consider what new sources of financial information you want to pay attention to in 2020.
We’d love it if you came back to check out our videos and blogs! Be sure to check our other great source, including: books, podcasts, social media channels, or email newsletters. What are some of your favourites?
Day 23: Are you a ‘set it and forget it’ type of person? Or do you wake up at night wondering about your investments?
While our preference is probably somewhere in the middle, for today’s challenge we are going to look at the numbers. How did your investments do in 2019? Better or worse than you expected? It was a challenging year for the markets, and there’s plenty of uncertainty in 2020 both domestically and abroad.
If you have questions or concerns about your investments, make time to come see us soon.
Day 24 – 25: Remember how we talked about setting New Year’s financial goals? If you haven’t done that yet, now’s the time! Once your goals are in place, including what you want to achieve, how much it will cost, and when you want to achieve it by, you should know how much money you have to put away to make these dreams a reality.
Be sure to factor in your tax return and allow for some variance in case a priority turns out to be more expensive than expected. And if your goals are longer-term priorities, make sure you have your savings tucked away in a financial product that will ensure good returns.
For example, Manulife’s All-In Banking account automatically moves excess money into your savings account each night, making the most of its interest rate. Want to learn more?
Day 26: We have talked about expenses and revenues–the two sides of your balance sheet. Now, it’s time to talk about the sheet itself!
Do you have a budget template? No, I’m not talking about all the bills swirling around in your head or piled on your nightstand! I mean a document which lists out your income, your costs, and your savings.
We recommend the Worry-Free Income and Expense Worksheet, which you can download from our site here. We have also launched a video that includes how to use this spreadsheet. Visit our Videos page and watch the first video in the Transforming your Finances Series.
Day 27: Do you like buying things on sale? Then we have good news for you! It’s time for another spending challenge.
Notice how you are much more deliberate in your spending when you must physically give coins and bank notes to the cashier? It’s not just you. Psychologically, that tap of your card against the reader just doesn’t register the same way as handing over a wad of bills. A 2001 MIT study found that, “shoppers spend up to 100% more when using their credit card to pay instead of cash.”
Put away the plastic today because everything is going on cash. Think of it this way: everything you buy today is half off. You’re welcome!
Day 28: You should have a pretty good picture of your financial situation now: the good, the bad, and the ugly. Now, who else in your life needs to know about it?
Oftentimes, one member of the family handles more of the family finances. While it may be OK to have designated roles like ‘bill payer’ and ‘grocery buyer’, it is not OK for one spouse to be unaware of the financial state of the family. Even kids need to know some basic information so they can learn good financial habits down the line.
With 2020 well underway, it’s time to ready your financial ‘state of the household’ address and share it with those that need to know.
Day 29: So, you’ve had the conversation with your loved ones about how the family is doing today. Now, it’s time to think about the future.
Hopefully, you and your loved ones are in good health and continue to be for many years to come. However, accidents can happen and they are not always within your control.
The Association of Workers’ Compensation Boards of Canada said there were 951 workplace fatalities in 2017 (the most recent year for which data is available). Workplace injuries and deaths disproportionately affect men: nearly 97% of all deaths and 60% of all claims in which work time was lost. While the most common group to suffer a workplace injury is those aged 50 and older, it can even happen to teenagers.
If you are a primary income earner, consider how you will protect your loved ones if you were unable to work. Have you set up a will? Power of attorney? Do you have adequate insurance to cover a funeral or protect your families home? If you would like to explore these difficult questions, please contact us.
Today’s challenge is to pull out all your insurance policies and group coverage and make sure all your bases are covered. If you are unsure, review everything with your Financial Advisor.
Day 30: You’ve done it! You have made it through 30 days of difficult but important conversations and examinations!
As one stage of your journey ends, another begins. The habits you have established in January should help you become better financially equipped for the remainder of 2020. Keep this article handy for 2021 and future years–it never hurts to have a refresher to help you stay on track.
How did you do? What did you learn? Let us know so we can toast to your continued success!