Over 58% of Canadians do not have sufficient emergency savings to last beyond four weeks, with 31% unable to survive beyond a week.
While this survey was conducted during the ongoing COVID-19 crisis, our research indicates that Canadians are a little behind when it comes to emergency savings.
A 2019 BMO poll indicates that only a third of Canadians with long-terms savings are keeping money aside for an emergency fund.
If you do not have sufficient emergency savings, one of the best ways to build a fund is to cut your daily expenses. We’ve created a list of simple yet effective tips for saving money regularly.
8 Simple tips for cutting your daily expenses
The Canadian household credit market debt has reached 176.9% when compared with the average household disposable income.
Start by creating a strategy to manage your current debt. You can start by paying down your highest interest debt first. Make sure to pay at least minimum payments on other loans (debt avalanche strategy). Another option is to pay your small debt first to build momentum and carry it until you clear all your debts (debt snowball).
Reducing your ongoing debt payments will help you dedicate more money to your long-term savings goals.
Pro tip: Ask for a rate cut or use a balance transfer card.
If you’re paying higher than average interest on your debt, it’s time to negotiate these rates. For those finding it difficult to make timely payments, discuss your current scenario with your lender and seek an affordable payment plan and a rate cut. A lower interest rate will help you pay down the principal quicker, thereby having some extra savings.
You can also use a balance transfer card to replace high-interest debt with low introductory period offers. The trick is to be mindful of the balance transfer fee you’ll pay for this transaction.
More than half of the Canadians eat out at least once or more every week, as per recent findings. Research reveals that Canadians spend 35% of their food budget on dining out.
If you’re looking for a way to cut your daily expenses, you may want to limit dining out.
The same applies when you buy lunch at your office. Instead of paying $7 or $10 for lunch every day, start taking homemade food to your office. Not only will you be eating healthy, but you’ll also save money on your food bills.
You can do the same with your coffee. Buying a bag of coffee beans from a supermarket and brewing your own coffee will help you cut your food expenses further.
Do you prepare a grocery list? It’s tempting to just rush into the supermarket and buy all that you need, but in the process, you end up buying a lot of stuff that you don’t even require.
Here are some smart grocery shopping tips for your next visit to the supermarket.
● Use coupons to lower your grocery bill.
● Create a list of groceries and stick to it.
● Buy staples in bulk during discount seasons.
● Choose generics over name brands when purchasing staples.
● Go to the supermarket instead of your nearest convenience store for better discounts.
● Compare supermarkets and see which one offers the best prices. Find out if they have additional discounts or membership for regular shoppers.
Shopping is another major item that you need to consider when trying to lower your expenses. And it doesn’t just include regular shopping but holiday spending as well.
As per research, Canadians were spending almost twice on online shopping in 2019 in comparison to 2014-15.
Holidays are fun, but you don’t have to break your bank to enjoy the vacations.
According to a study, Canadians often spend more on shopping than their monthly rent during holiday seasons.
Here is how you can cut your shopping expenses:
● Use 72-hour rule, i.e., whenever you want to buy something wait 72 hours before you make the purchase. It’ll give you ample time to understand the utility of the product or service.
● Remove your credit card details from online retailers. That way you’ll have to input your card details every time, which may act as a deterrent when you’re on a spending spree.
● Plan holiday gifts that add more value and happiness. In fact, giving a handmade gift to your loved ones would be the best thing you can do.
● Retailers count on concepts such as FOMO (Fear Of Missing Out) or YOLO (You Online Live Once). These are marketing gimmicks to entice customers, so be cautious when overspending on shopping.
When was the last time you compared your auto or home insurance premiums with the ongoing market prices? The chances are you can get lower premiums by switching your provider or merely negotiating premiums with your current insurer.
Make sure to do your homework and find the current premiums for similar policies.
Canadians spend a lot of money on keeping their houses warm. You can cut your electricity bill by doing an energy audit of your home.
Start by replacing any incandescent lamps in your house with LEDs or CFLs. If you don’t have the budget to replace all the bulbs, simply change the most used ones.
Also, you can install a programmable thermostat to control heating better. It’ll allow you to manage your heating or cooling systems while away from home.
Do you have a club membership or gym membership that you rarely use? Most of the people are in the habit of putting membership fees on autopay. If you do not go to the gym often or rarely use other perks of your club membership, it’s about time to cancel it.
You can always go to an open-gym or community gym instead. You can also take a cycling or walking habit during summers.
Your cable TV might be costing you over $200. Switching to streaming services, such as Netflix, CBS All Access, or Amazon Prime Video, will immediately slash your entertainment bill. We did some research on subscription services and having a pack of three services (Netflix, CBS All Acess, Amazon Prime Video) costs under $25.
Some additional ways to cut your entertainment expenses is to take your family to a park or community gatherings instead of weekend getaways or movie theatre.
The trick to cutting your daily expenses is to find how much money comes in and how much leaves your pocket. Start tracking your expenses with a budget app, such as TimelyBills, and find areas where you can save money.
TimelyBills allows you to set bill reminders, track income and expenses, create category-wise budgets and get alerts when you cross monthly or weekly limits, and receive insightful monthly reports.
A little bit of caution and financial restraint goes a long way in saving more money.