5 tips to taking back control over your personal finances

5 tips to taking back control over your personal finances

Did the magical Holiday Season cast a vanishing spell on your cash?
Don’t panic! There’s still time to plug the holes in your leaky budget. Here’s some simple advice on making a realistic assessment of your finances and taking control of them after a costly Holiday Season.

Don’t stick your head in the sand

Few people enjoy sticking to a budget and even fewer enjoy cleaning up the mess afterwards. This is probably why we tend to make a rushed and inadequate assessment of our finances. However, this is no reason to stick your head in the sand – you have to know exactly how much you spent to be able to pay off your debts.

Make a budget and don’t spend frivolously

This seems obvious, but did you know that one in four Canadians is worried about living above their means? Try this: make a balance sheet of your income and recurring household expenses (mortgage, activities, groceries, etc.). Then, calculate the percentages. You’ll be surprised at how expenses you thought were trivial are actually significant! How often have you told yourself to tone down your frivolous spending?

How often do you say to yourself: This time, it’s for real! Coffee and restaurants are the most blatant examples of frivolous spending. Instead of buying coffee every morning from your favourite barista, why not make it at home. It’s an easy habit to start, and at the end of the week, will save you a considerable amount of money. As for meals at the restaurant, just factor them in when you buy your groceries. Often, you end up at the restaurant because you have a craving for something you can’t make at home. By bringing home fewer groceries and buying as you go, you’ll waste less.

Beware of impulse purchases

You know that little devil who whispers in your ear from time-to-time? Don’t listen to him. To help you, Pierre-Yves McSween, business and economy correspondent for Paul Arcand, offers a new way of looking at expenses in his new book, ”En as-tu vraiment besoin?” (Do you really need that?). It’s a simple enough exercise that enables us to question the choices we make as well as their consequences. The book is only available in French for the moment.

Contribute to an RRSP

Contributing to an RRSP at the start of the year is a great way to generate tax returns. In fact, contributions made throughout the year and 60 days into the next one are tax deductible; and this year, you have until March 1 to do so. This strategy lets you increase your retirement capital while reducing your income tax. If you are unsure as to the maximum amount you are eligible to contribute, consult the Notice of assessment issued by the Canada Revenue Agency. An alternative to this type of investment is a TFSA, which is basically a safety net fund to be used in case of emergency and without having to withdraw money from your RRSP. Whatever the case, if you haven’t already contributed, do it now!

Schedule a meeting with an advisor

Managing your finances when you’re not a professional can be burdensome and complicated. Why not let the pros find the best solution for you; if for no other reason than to confirm what you’re already thinking.

Written in collaboration with Alexandre Trudel, advisor.

Note: This blog post is provided for information purposes only. It is not a substitute for professional legal, financial or fiscal advice. For advice specific to your personal situation, always speak with your advisor. SSQ Insurance cannot be held responsible for any decision made as a result of reading this blog post.