When it comes to personal finance, many tips are mentioned repeatedly. While paying yourself first and spending less than you make are great tips, there are other tactics that are often overlooked. By focusing on the lesser-known skills, you could make a big difference in your financial health.
Save your wallet, and theirs!
Tracking your spending
Keeping tabs on your spending is key to managing your finances. While many people have a general idea of how much money is going in and out of their accounts each month, it’s easy to lose track of things. That’s why you want to track your spending a bit more regularly.
Essentials like groceries, utilities, housing, and transportation are typically easy to keep track of since they’re major expenses. However, things such as eating out, entertainment, and subscription services can get out of hand if you’re not paying attention.
To keep track of your expenses, consider using an app or writing down every transaction you make. Even checking your bank and credit card statements can help identify some spending patterns you may not be aware of. There’s nothing wrong with spending, but you want to make sure your money is working for you the way you want it to.
Regularly reviewing your spending is a great way to keep you in check. If you notice any unnecessary expenses, adjust your habits accordingly.
Taking advantage of employer benefits
Some employer benefits can be incredibly valuable. However, it’s up to employees to maximize the return.
What you want to look for is if your employer offers any financial benefits. For example, if they have a pension plan. Joining the pension plan early and maximizing contributions means you could have more money for your retirement. Alternatively, if your employer has a employee stock plan, it could also be valuable as employees can typically purchase stocks at a lower price.
Beyond financial benefits, think about health benefits that could potentially help you. If you have a recurring injury and your employer offers a health spending account as a benefit, there’s no reason you shouldn’t take advantage of it by seeing a physiotherapist. Not only will it help you recover from your injury, but it can also increase your productivity.
Don’t forget about wellness programs. Many companies offer perks like gym memberships, mental health support, or wellness incentives. These can save you money and improve your overall well-being.
Automating your savings
Automating your savings can be a game-changer. Not only does it take away the effort of saving, but it also helps you create a financial cushion. If you turn that automated savings into automated investing, you can really improve your finances.
Start by setting up an automatic withdrawal from your bank account to a savings account. Time the withdrawals to happen a day or two after you get your paycheque, so you don’t miss the money. Once you get used to the withdrawals, try to increase the amount so you’re saving even more.
At the beginning, this savings will be ideal for your emergency fund. However, once you’ve saved three to six months’ worth of expenses, you’ll want to consider automatic investing so you can grow your money even more. For example, you could have your Registered Education Savings Plan (RESP) provider automatically withdraw money from your account and then have that money invested. That ensure your child’s future education account is always growing.
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Investing in the markets now
For many people, investing in the markets may seem impossible since they have no idea where to begin. However, it’s important to note that investing immediately can pay dividends.
Instead of trying to learn everything you need to know about the markets, it’s a better idea to start investing in a balanced fund to get you started. Balanced funds will mix stocks and bonds to spread the risk. Since you’re not investing in a single asset class, you can ride out any ups and downs of the stock market.
When you’re ready to learn more about investing, you could read some books to increase your knowledge. At that time, you might be interested in other investment products that could help you increase your return.
For those that prefer to be hands off, there are many options out there such as investment advisors and robo-advisors. Instead of being paralyzed by all the noise out there, start investing now so you can watch your money grow.
Keeping yourself busy
Keeping yourself busy can be a surprisingly effective if you want to keep your finances in order. By engaging in activities or hobbies that don’t cost a lot, you keep yourself occupied, which means less time to spend on random things.
Some inexpensive hobbies that can take up a lot of time include exercising, gardening, and reading. You don’t need expensive equipment to exercise, and it keeps your body healthy. Those who garden may end up growing vegetables that can help reduce grocery costs. Reading is incredibly invaluable as you can borrow books for free and learn about different things such as baking, investing and more.
Volunteer work can also fill your time meaningfully. Many communities offer opportunities to help out without spending a penny. With so many organizations available, you can pick one that’s meaningful to you and give back to the community.
Connecting with friends and family can also be enriching and cost-effective. Organize game nights, potlucks, or outdoor activities where you don’t need to spend much.
Staying occupied with these activities helps you maintain a balanced lifestyle while keeping your finances in check.
Barry Choi is an award-winning personal finance and travel expert. He regularly appears on various shows in Canada and the U.S., where he talks about all things money and travel. His website - Money We Have - attracts thousands of visitors daily, looking for the latest stories on travel and money.
