Resolutions for 2018: 5 simple tips to better manage your expenses
1. Set attainable goals
Do you have hard to control habits? It’s easier to try to regulate one of these habits than to just say “I will spend less.” Set attainable goals, which are precise and measurable, that will lead to tangible achievements; for example, one month without eating out, one year without buying a new pair of shoes or three weeks without drinking any alcohol. Not only will you be happy to attain these goals, it may make you realize that these habits are more controllable than you thought.
It is only by attempting this challenge that we often realize to what extent we spend money on things that we can easily go without.
2. Live according to the 1-year theory and 2-week rule
This 2-in-1 trick relates to expenses associated to the small (or not so small) pleasures that we offer ourselves from time to time. Before making a ”feel good” purchase, ask yourself the following question: “Will I use (or wear) this at least five times in the next year?” If you can come up with five occasions where the item will be used, then move on to the next question. If not, consider renting or borrowing, instead of buying. An item such as a GoPro for your next trip, a snow blower in anticipation of THE storm of the century, or a ball gown for that one night out.
The second question, which needs to be asked two weeks after having the urge to buy the little pleasure: “Do I still want the new BBQ, the cottage in Tremblant, the Goldendoodle?” If the answer is no, then you were wise to wait before buying; if, yes, then you pass our test and we consider that this purchase will likely make you happy, and may well be worth it.
3. Control your expenses using a practical budget
Obviously, we cannot overlook the budget; it can be the best tool to control expenses. For easy access and updates, create yours using a mobile app or your computer. The trick is to plan the budget for a typical month and then divide it into three sections: your revenues, your fixed expenses and your variable expenses.
Let’s examine variable expenses. These budget entries include your trips to the grocery store, shopping mall, pharmacy, restaurants, etc. These are the expenses over which you have the most control. Set realistic limits for each category and follow-up every month to see whether or not you are staying within limit.
Doing monthly follow-ups allows you to adjust your limits when you realize they are not realistic, and stay on top of your good moves and not-so-good moves.
4. Optimize fixed expenses
Your monthly budget includes fixed expenses such as your rent, insurance, banking fees and cell phone/internet package. Although you have less control over these monthly expenses, you can make sure that you commit a reasonable amount. The danger with these types of expenses is that we tend to get lazy and assume that we cannot change them.
Request quotes from various insurance companies, shop around for your cell phone package to find the one that best suits your needs; compare banks by keeping in mind your transactions. You may realize that you are overspending in certain places.
Interesting fact: Insurance companies are the only companies that do not reward client fidelity. Meaning? It is more profitable to always look elsewhere than to stay loyal.
5. Take decorating into your own hands… literally!
As real estate experts, we are well aware of the importance of feeling good at home. For many, this means decorating and personalizing their abode. Anyone who has ever moved to a new place or lived through renovations can vouch for how expensive this can be.
If you want to freshen up your décor, we suggest taking it into your own hands and doing it yourself! Curtains, a coffee table, a headboard and a soap dish… you can make them all, without stepping into a Pottery Barn. Personally, we love to seek inspiration on Pinterest and see how using what we have on hand can change a room’s look. It can be as simple as adding legs and changing the knobs on an old piece of furniture, or painting a design on a white wall.
And, while we’re at it, can we just say that the do-it-yourself trend could save you money should you choose to apply it to that morning coffee you buy day after day. Another attainable challenge!
Want to make the most of your money on your next real estate purchase? Drop by the Mondev sales offices on Saint-Denis to find out which project is best suited to you. Remember: the key here is not to stop spending, but to spend wisely.