Many Canadians are familiar with the end-of-the-month jitters. Managing personal finance can be stressful, and fun nights out or impulse shopping purchases can come back to bite you when the bills arrive. But there’s no need to beat yourself up — the good news is there are practical steps you can take to help reduce your expenses.
Set the right budget
Most of your financial strategy should involve sticking to a budget, but finding the right number will require a good understanding of your current financial situation.
Once you know what you’re working with, organizing your expenses is important to get a better sense of where your money is going and where you can cut back.
Cut unnecessary subscriptions
Now that many services are subscription-based (meal boxes, online memberships, streaming services, etc.), your monthly subscriptions should be one of the first places to look when cutting expenses.
It’s easy to forget about cancelling a service after you’ve stopped using it; over time, those fees can become an unnecessary drain on your expenses. Check to see if you’re still using everything you’re paying for.
Small monthly payments may be tricky — single-digit monthly charges can add up by the end of the year. Cutting a $10 monthly fee now can save you $120 over the course of a year.
Auto-renewals may cost more once an introductory discount runs out. If you take advantage of introductory pricing, you may want to set a reminder to cancel the service when the discount ends.
Reduce utility costs
Utilities are a major monthly expense on most people’s fixed expenses. But a little bit of mindfulness can save you money over time. And don’t worry — it’s possible to reduce your energy and water consumption without compromising on comfort or convenience.
Some ways to cut down on utilities are simple:
- Turn off lights when you leave a room
- Use natural light when possible
- Make sure your faucets and shower heads aren’t dripping
- Unplug your unused electronics
If you are willing to sacrifice a bit of luxury, some strategies can reduce utility expenses further:
- Change to a low-flow showerhead
- Limit your time in the shower
- Find moderate temperatures in the hot summer months and the cool winter months
- Wash larger loads in your dishwasher or laundry
Be a savvy shopper
Saving money on purchases means optimizing the way you shop.
Know your budget: While you can’t plan for every purchase, working within your budget can help you reduce impulse purchases or carry more debt.
Comparison shop: The internet has made comparison shopping more convenient. Check the stores in your area for deals and coupons. Mobile apps like FLIPP can show you when stores have your favourite items on sale, and collecting loyalty rewards or coupons can save a fair amount of money at checkout.
Consider your options: Instead of buying, is it something you could borrow? Or buy second-hand? Do you care if it’s a brand name or the store brand?
Know how much things you regularly use cost: If there are favourite items you know you want, track their pricing, that way, you’ll be more apt to spot a deal.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.