Living within our paychecks isn’t an easy challenge.

Spending less money than you earn requires a thoughtful review of your finances and self-discipline. According to the Financial Consumer Agency, providing financial literacy to Canadians, minor changes in your spending habits can result in considerable savings in the long term.

The key is to find places where you spend unnecessary money and dollars that don’t add value to your life. Then, remove money waisters or replace these expenditures with activities and purchases that add value. The overall result can increase your chances of achieving long-term goals and improve your happiness.

Track your Expenditures Every day for a Month

You probably spend money in places where you don’t notice the accumulation. To trim your costs, try tracking how much money you spend daily for a month. For example, take note every time you open your wallet during the Month of November. You may have a banking app that does this for you, or you may like to use a spending journal. Special attention is often needed on daily expenditures like coffee, eating your meals out, and impulsive purchases.

Now that you have the raw data you need, ask yourself how to minimize costs and ensure you get the best deal possible. Bills are the first place to start. If your mobile costs you a fortune, ask your provider if there is a cheaper plan available or try blocking the data on your phone to save you money. If your phone bill, internet, and cable bill are with separate providers, bundling your services with one provider is another choice that may offer a solution. Reducing administration costs across providers will keep money in your account.

Your bank account charges are another place to look for savings. Speaking with a financial advisor at your local bank is free. They can analyze your financial products and help you maximize your savings. For example, you could renegotiate an expensive mortgage rate or lower your monthly checking account charges.

Finally, check your bill receipts every month. If you find ongoing payments for products you no longer need, mistakes or overcharges, you’ll find them immediately. Correct them as soon as you can before the charges become a problem.

Reduce your Daily Spending to keep that Below the Amount you earn

Small savings add up quickly. When you open your purse or wallet to pay for that Brown Sugar Oat Americano that costs $6.65, the Harvard Business Review recommends asking yourself two questions:

1. Is this essential for my survival?

2. Is this expense genuinely contributing to my happiness?

If your answer is yes, then buy the Brown Sugar Oat Americano. If it isn’t, for example, you just wanted to walk into work holding a fancy paper cup, there may be a better option for you. For example, the daily newspaper cost around $1.50 and a subscription for a weekly magazine adds up to $2.35 per issue – that’s not only cheaper overall but looks smarter.

Next, 48-hour flash sales on outdoor patio furniture at The Bay may look appealing but know your needs. Larger purchases often take time. Experts advise that you wait 24-hours before deciding on any large purchases. Your emotional response to a product will calm, and you’ll adopt a clearer-minded attitude towards your choice when you wait. So, if you know Bay Days is coming, plan your purchases or consider waiting for the next day or the next sale.

Also, reducing your daily expenditures is simple. Adopting good habits like bringing a refillable water bottle to the gym with you, packing a bagged lunch rather than eating at the kiosk, and taking public transit or cycling to work not only save you money but are also better for the environment.

Additionally, adopting an eco-friendly attitude is healthy for your wallet. Feel free to grow your garden, buy fewer, higher quality pieces and rent a car on the occasional weekend rather than owning your car in the city.

Finally, pay your credit cards and bills on time and in full to avoid extra charges. The average credit card charge rate is 19.9%; that’s money you can spend on living rather than on debt.

Analyze your Potential Weekly, Monthly, and Annual Savings

How much money could you save daily, weekly, monthly, or annually? For example, two cups of coffee per day, five days a week, could cost:

One Day: $4.21 x 2 = $8.42

One Week: $42.1

One Month: $168.4

One Year: $2,020.80

Happiness is a Factor you can Afford to Include in your Budget

You can live well and save money while still acting as a contributing member of your community. Our happiness is a factor that even governments are increasingly concerned with incorporating into policies. The United Kingdom, France, New Zealand, and Canada have already included measures of well-being in their decision-making processes. Studies show that earning more money does impact your happiness when it’s up to CAD 100,000.

However, more doesn’t significantly impact your experience. Consider improving your financial position and earning more money to contribute to your daily to annual budgets.

Spend on Experiences

You may choose to go to a film or take a yoga class rather than buy an extra pillow set. Spending money on experiences increases your perceived value in life and connects you with others, adding value to your perception of happiness. Saving money for a much need vacation is a financial choice that may bring a wealth of experience and necessary rest.

According to a recent study at The University of Berkley, the experiences and things that bring you the most satisfaction may depend on your personality. They gave seventy-nine students $10 each and told them to choose between the bar and the bookstore. As a result, introverts were happier with the bookstore, while extroverts who chose the bar felt more satisfied with their decision.

If you want to have fun and contribute without damaging your budget, volunteering your time is a satisfying form of giving to others. When you volunteer, you are giving back to those around you. In addition, if you choose your volunteer activities well, they lead to better job outlooks in the long term. Volunteering is especially valuable for new immigrants who require Canadian work experience to earn good jobs in their trained profession.

Time and Location

Time and location matter. When Covid-19 kept us at home, researchers recorded affected individuals felt a 10% higher level of satisfaction because they saved time working from home and shopped locally, even though it was more expensive than shops at a farther distance. Shopping in your neighbourhood benefits small businesses and brings you into the community as a member. Rather than buying your morning coffee from a vending machine, a local café may purchase you more happiness.

Make Significant Financial Goals

The money you save from lowering your costs can buy something significant long-term. A rainy-day fund, house down payment, retirement goals, university tuition for yourself or your children, these long-term dreams are closer than ever with habitual savings.

Saving money may do more than give you a buffer or lead you towards your first mortgage. In fact, a recent study published in the Harvard Business Review found that we feel happier when we see money in our checking or savings accounts. In fact, of five hundred people surveyed in the U.K., those with $500 cash in their accounts scored 15% higher on questions related to life satisfaction.

Your finances are in your control. Plan your budget online to learn how you are spending and saving money to live within your means and start maximizing your use of money.

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