Apr. 26, 2022: I found this article:
Apr. 20, 2020 "We asked personal finance experts how to find 'hidden money' ASAP": Today I found this article by Truc Nguyen on CBC news:
If you've been financially impacted by COVID-19, or are generally concerned about how your household finances might fare in the coming months, one expert recommendation is that you cut both fixed and variable expenses where possible to immediately improve cash flow.
By doing so, you'll create more breathing room in your monthly budget, ensuring that any money or income that you do have available can go toward necessities like "paying bills, keeping a roof over your head, and buying groceries."
To help you identify 'hidden money' in your budget, we reached out to three Canadian experts — finance writer Renee Sylvestre-Williams, personal finance commentator Preet Banerjee, and Liz Schieck, a certified financial planner at The New School of Finance — for their budget-trimming ideas, downgrading how-tos, and other spending (and savings) strategies for these unprecedented times.
The first thing to do, say the experts, is to go over your bills and statements to see where your money is going in the first place — this will help you identify potential savings quickly for your personal situation.
"Gather your debit and credit card statements for the last two months and create an itemized list.
And every item on that list of expenses has to go into one of three categories: keep, eliminate or reduce," says Banerjee.
By doing this exercise, you might that you're not even using some of the subscriptions, memberships and services that you normally spend money on.
"It's really easy to forget about all the different apps and things that you might have signed up for that are being charged automatically," says Schieck. "Even though you might want them during normal life, you might not use them so much when you're stuck at home."
She recommends reviewing all your expenses to find the line items that aren't bringing you any value anymore, or that you're definitely not going to use during this period of self-isolation.
Once you've done that review and assessment, here are some ideas for freeing up money in your budget.
Ask for discounts on your fixed expenses
You might be able to free up money in your budget by reducing some of your fixed expenses like telecommunication costs and bank fees — it just takes time to reach out to your service providers online or via phone.
"Generally speaking, it's always a good policy to look at all your insurances every year and see if you can find a better deal," says Sylvestre-Williams. "Look at your phone bill and your internet, and call your provider to discuss options."
In some cases, it can take just minutes to negotiate a loyalty discount, sign up for a new (and cheaper) plan, or find a new service provider who can offer a better price. There might even be special pricing or financing measures available at this time because of COVID-19. "[Companies] understand that people are under pressure in terms of loss of income," says Banerjee.
Notably, some auto insurance providers have been offering rebates and reduced premiums to drivers who are on the road less often as a result of social distancing — the catch is that often you have to ask for the savings. "I wouldn't wait for them to offer that discount... I would call up proactively and see if you can get a discount," says Banerjee.
Put memberships on hold
Eliminating recurring expenses that you've either forgotten about or no longer need right now is one way to quickly find 'hidden money' in your budget.
"Identify them, and contact those providers to either cancel them for the time being, or see if you have any options where you can have a moratorium on payments," says Banerjee.
Examples of annual or seasonal charges — some of which might be set up for autorenewal — could include things like social-club memberships, professional organization fees or even fishing licenses.
Gym memberships — which generally aren't being used during social distancing, although some instructors and gyms are offering online workouts — can be put on hold in favour of free online classes, too, suggests Sylvestre-Williams. Similarly, you can try to pause or cancel charges for public transportation passes, co-working space memberships, and other monthly spends.
Cancel any subscriptions you don't need
Subscription creep is a phenomenon that can negatively impact your budget. "We have this subscription economy where there are so many things that are now subscription-based; for example, your computer software that used to be a one-off license for $150 might be $8 a month now," says Banerjee. "It seems like a small thing, but all those little subscriptions add up over time."
He suggests auditing your subscriptions on an annual basis, at minimum, to see if you still use them. "We tend to sign up for subscriptions fairly liberally, and then sometimes we forget about them. And we still have those expenses coming out even if we're not using those services," says Banerjee.
Right now, for example, you might want to keep at least one video-streaming service while you're spending a lot of time at home. But you could save money by cancelling any other similar subscriptions for now, and switching things around later. "Keeping one streaming service makes sense, but having three at the same time rarely does," says Banerjee.
Downgrade the subscriptions or services that you're still using
Even with memberships and subscriptions that you still need or want to keep while social distancing, you can save money each month by downgrading the plan that you're on, says Banerjee. "When you go through the items [on your statements] line by line, make sure that you think about what it is you could downgrade to save money," says Banerjee.
For example, you may be signed up for a Premium plan with Netflix because it offers HD and ultra-HD quality streaming; but for now, the cheaper Basic or Standard monthly plans might make more sense with your budget. Similarly, if you're mostly at home and using WiFi, you could temporarily change your cell phone plan to a cheaper package with less data.
Use up loyalty points, store credits and gift cards
If you're in any loyalty or reward programs — perhaps with a credit card company, retailer, hotel chain, or airline — see what you can use them for that might be helpful right now. Your airline frequent flyer miles could be redeemed for gas or hardware store gift cards, freeing up cash for necessities like rent or groceries.
Similarly, this might be a good time to review and use up any store credits or gift cards you might have sitting around as needs arise.
We asked personal finance experts how to find 'hidden money' ASAP | CBC Life
Apr. 27, 2022 "Smart financial goals to set while you're still young": Today I found this article by Mitchell Glass on the Financial Post:
Between graduating college, maybe starting a family, climbing the career ladder and squeezing in a social life — it’s hard to find time to think about smart financial goals when you’re young.
But you have to make time.
Setting the right financial goals now can change the trajectory of your life.
There are some ways in which it’s impossible to make up for past mistakes or make up for lost time.
Your future self will thank you if you hit these three essential goals.
1. Learning to live with a budget
Living within your means is a habit that sets the foundation for the rest of your financial plan. The quicker you develop this habit, the better.
If you’re not developing good habits, you’re developing bad ones. And bad budgeting when you’re young can lead to costly consequences that last long into adulthood.
Kickstart your budget planning with a simple four-step personal finance audit.
Perform a savings and income audit
To start, you need a clear picture of what you’re working with.
Write down all your bank account balances,
noting which funds are easily accessible
and which are tied up in illiquid investments. Then, jot down your expected net income per pay period.
Nail down fixed expenses
List out all your fixed and variable expenses. Fixed expenses stay consistent each month, like car payments, cellphone bills and health insurance.
Variable expenses, including groceries, entertainment and utility bills, fluctuate each month. For these, you’ll need to estimate — or better yet, track your expenses with an automated budgeting app.
Once that’s done, calculate your cash flow by subtracting your total monthly costs from your expected monthly income.
Minimize variable costs
Your goal is to maximize cash flow while maintaining a pleasant standard of living. To do this, look for ways to save on your variable costs.
That might mean preparing more home-cooked meals,
adjusting the thermostat
and taking advantage of coupons and discounts.
You might also be able to reduce certain fixed costs, though it can be more difficult. Your rent certainly isn’t going down unless you pack up and move.
However, payments like your cellphone and insurance bills deserve regular scrutiny. While you probably did your research and chose the best option when you first signed up, new deals and better offers pop up all the time. Don’t just set it and forget it for years on end.
Choose your budgeting method to reach your goals
After calculating the money you have coming in and out, choose a budgeting plan of attack. The best budgeting strategy is the one you’re most likely to stick to. This can vary from person to person, so explore all the different budgeting methods to see which suits you best.
2. Jump starting your nest egg
When you’re young, it’s important to consider your short and long-term finances together.
As you set up your budget, try to set aside 10 per cent to 15 per cent to contribute to your retirement fund. If that’s not doable, contribute as much as possible, then set goals to increase contributions over time.
Retirement may seem like eons away, but investing young can have a dramatic effect on your eventual portfolio size.
For example, if you invest $1,800 at age 20 — just $150 per month — and earn an average return of seven per cent per year (compounded monthly), your portfolio would grow to nearly $48,000 by the time you retire at age 67.
If you waited until you’re 40 to invest that $1,800, it’d be worth less than $12,000 by age 67.
That’s the difference 20 extra years of compounding has on a small, one-time $1,800 investment. With ongoing contributions, the benefits of investing young are even more jaw-dropping.
If you are unsure of traditional investing avenues, such as stocks, you can also look into alternative options.
That said, before you start investing for retirement, you should build a solid emergency fund.
3. Creating a debt control plan
Oftentimes, long-term financial success comes down to managing debt wisely.
Over half of four-year university graduates leave college with student debt. And 69 per cent of student debt holders also have other forms of debt, including credit card debt and car loans, according to a U.S. Census Bureau survey.
Not all debt is bad debt, but it can easily complicate your financial goals. When loan payments eat up your entire monthly income, your saving and investing goals get put on the backburner.
If you learn to manage your debt while you’re young, you can prevent it from spiralling out of control.
Set up a debt repayment plan
Your debt repayment plan will vary on your specific loans and rates. But it generally makes the most sense to repay your most expensive loan first. If your debt already feels out of control, call your lenders. Believe it or not, they probably want to help.
Use credit wisely
Debt gets a bad rap, but it’s often a necessary evil for expenses that will improve your life. You need some sort of debt to build your credit score, with few exceptions.
Debt isn’t something you should completely avoid because as your credit score grows, you can lock in better rates on auto loans and mortgages.
The key is using debt responsibly. That usually comes down to paying off your bills on time each month and not biting off more than you can chew.
To see where you stand credit-wise, you can request a free credit score.
By working toward these three goals, you’ll be well on your way to hitting all your money-related targets and objectives.
This article was created by Wise Publishing. Wise is devoted to providing information that helps readers navigate the complex landscape of personal finance. Wise only partners with brands it trusts and believes may be helpful to the reader. This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Smart financial goals to set while you're still young | Financial Post
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