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6 Smart Money Moves to Make To Stay Financially Healthy

Tips to stay financially healthy all year long

By Julie Jaggernath

Are you wondering what kinds of smart moves you could make to get ahead with your finances? If your budget isn’t working or you’re not seeing your credit card balances go down, whether it’s January or June, don’t let another day go by without making some changes. To jumpstart a year of positive financial gains you must get started, or 12 months will pass and you’ll still feel stuck in the same position you’re in right now.

Let Go of Worrying About What You Did Wrong With Your Money

Everyone worries about their money sometimes. Stressing about what you did or didn’t do, or what almost happened, sets your focus on the past. But as we all know, we can’t change the past. Learn from your mistakes, but don’t dwell on them. Set your focus on what you can do and what you can change.

Not convinced? Think about the last time someone told you about the day they went fishing. The story about the ‘one that got away’ is often longer than the story about the fish they fried for dinner. The same thing happens when someone is shopping a clearance sale. They talk more about the deal they almost got rather than what they actually bought. This happens, in part, due to how losses and mistakes make us feel worse than comparable gains and successes make us feel good. And we’ll do whatever it takes to feel good.

With that in mind, here are 6 smart money moves you can make and feel good about:

1. Check In On Your Money Management System

Call it a budget or a spending plan, but how you manage your money matters. A lot. A quick way to see if your system is working or not is to compare your savings balances and debt levels to where they stood a year ago. If your income was upended with the pandemic go back to 2018 and 2019 to see where you stood then compared to now. It’s usually easy to get these details through your online banking.

The Simple Way to Keep Track of Your Spending

Some financial institutions also allow you to come up with your current net worth amount. It is the difference between your assets and what you own versus your liabilities and what you owe. Work through the steps to calculate your net worth. Then take a screenshot and save it in your calendar for 12 months from now. It will be a good measuring stick to check your progress as you make changes to improve your situation.

Interactive Spreadsheet to Calculate and Adjust Your Budget

2. Bump Up Your Savings Account

Increasing the balance in your savings account won’t happen by accident. Make it a priority by automating how you save. The way to do this is to transfer money automatically from your chequing account to your savings as soon as you get paid. Your online banking should allow you to set this up yourself, or contact your financial institution for help. By moving the money out of your spending account as soon as it is deposited, you will keep it safe from yourself.

When you ‘pay yourself first,’ before you take care of bills and other obligations, you’re more likely to achieve your yearly savings goals.

How Savings Can Help You Stick to Your Plan to Pay Off Debt

3. Cut Your Debt Down to Size

Saving and paying down debt are not mutually exclusive; they should both be part of a balanced approach to how you manage your money. Whether you need an aggressive debt reduction plan or want to explore debt consolidation options, put pencil to paper and outline a plan.

If you feel overwhelmed, keep your plan simple. Maybe you need to call your bank or credit union and make an appointment to see a lender. If you don’t know where you stand, get free copies of your credit reports or login to your online banking to get your balances.

If you don’t know how you’re spending your money, your plan needs to start with tracking your spending for the next two to four weeks. This will identify habits and areas where you could save to come up with the money you need to pay your debts more quickly.

If you would like help to create a pay cheque plan so that you can see how best to allocate your income, contact us and we’d be happy to help. Our credit counsellors are experts at helping clients build budgets that work. They even have free tools and resources that they’d be happy to share with you.

Becoming debt free within the year might be unrealistic, but a plan for the next 12 months will get you on track to improve your financial stability for the long term.

How to Stop Living Pay Cheque to Pay Cheque

4. Organize Your Financial Documents

When you organize your financial documents at the start of the year and set aside what you need to file your taxes, come March you’re ready to submit your income tax information as soon as you receive all of the slips you need. Then, if you receive a refund, use it to top up savings or pay off a little more debt. If you end up owing, it gives you time to find ways to pay what you owe without penalty by April 30. Ignorance is definitely not bliss when it comes to our income taxes and there’s a lot to lose if we don’t file our taxes.

Regardless of the time of year, organize your bills, statements, and other important money-related documents. Audit what you’re paying for and cancel or temporarily suspend any services you don’t need or want. If you find a service you think you’ll use, try a free version of something similar to see if it’s an expense that you really want to include in your budget. Subscriptions are a silent spender, and the service providers will welcome you back when you’re ready to buy in again.

Create electronic or physical file folders to store what’s key. Set calendar reminders so that you don’t miss important renewal or payment dates. Decide how best to backup and save your data or files so that they don’t risk getting lost.

5. Contribute to Your RRSP

If your retirement savings accounts are looking a little sad, as you pay your debts off, direct the money you used to use for payments to your savings account so that you don’t spend it inadvertently or unintentionally.

If you haven’t taken advantage of your Registered Retirement Saving Plan (RRSP) contribution room, don’t miss the opportunity to invest in your future. Contributions made during January and February can help offset income taxes in the current or previous calendar year, whichever is more beneficial to you. If your employer has a matching program, use as much as you can because it’s like earning 100 per cent interest on your money, before you even start investing it.

Why You Don’t Want an Income Tax Refund Next Year

6. The Smartest Money Tip That Works Every Time – Commit to Living Below Your Means

If you’re looking for the single, smartest money tip that will work every time, it’s to live below your means. Filter every spending decision through your budget so that you always, without exception, spend less than you earn. Is this easy to do in a culture where being in debt is normal and credit is cheap? No, but most everything that’s worth doing will take some effort.

To see an improvement in your finances one year from now, get started. Commit to a no spend challenge for 2 weeks starting right now. Start saving even if you don’t know what you’re saving for. Pay extra to your debt whenever you have a little extra. Do something – anything – to get started and it will be easier to keep going.

How to Deal with Credit Card Debt

Your Best Money Move Might Be to Get Professional Help

Sometimes you’ve got the best money move ideas but don’t know how to make them happen. Other times life feels so overwhelming it seems easier to do nothing at all. But to improve your financial situation you’ve got to do something. Reach out to us and we’d be happy to help you get started. Our counselling appointments are free, confidential, and without judgement or criticism no matter what your situation is. Don’t let fear of the unknown hold you back from achieving your goals and dreams!

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