The average Canadian had $1.49 of debt for every $1.00 they earned in the second quarter of 2011. (This debt includes mortgage and consumer loans.) Are you one of the many spending more than they earn? If so here are a couple of steps you should take to evaluate your spending / savings patterns.
The first step is to track your spending for a month – and yes, that includes all of the items that you buy with your spare change (such as coffee). Until you know what you spend your money on – it’s impossible to change your spending patterns. If you would like a template to track your money, let me know and I can send you one by email or snail mail.
Once you know what you’re spending your money on, you need to analyze your spending habits. Do you really need two Grande Starbucks Lattes every day?
You need to start paying down high interest debt. Start with your credit cards and take the money you’re no longer spending each month on frills and put that extra into your payments.
After each pay check – you need to arrange for a certain percent / amount to go directly into a savings vehicle – whether that’s an RESP, RRSP, TFSA or a Savings Account will vary depending on your financial plan. This is what your parents told you to do when you got your first job and it makes as much sense today as it did then.
Do you need help with any of these steps – give me a call and we can arrange to get together.