Financial specialists all advise to set aside a cushion of at least £1,000 to cover unexpected expenses such as vet fees for Pitou or to pay the unexpected dentist bill for the youngest one. Here are five easy tips.
“The more you spend on things you don’t necessarily need, the less you save” – Piter Blain
1. Set a goal
Do you dream of a trip to the south or a vacation in the Gaspesie? By setting aside £25 per week or £100 per month, you can easily save £500 in six months. “By putting our goal in writing, it becomes motivating, a bit like someone who works out at the gym. His goal is either to increase his muscle mass or to lose weight,” explains Piter Blain, financial reorganization advisor.
In budgeting, an amount is set aside every week for contingencies. Unfortunately, lack of discipline or the temptation to “spoil yourself” too often takes over. One way to stay within your budget is to make smart purchases. Young parents know this. A friend tells them that a bag of diapers of a particular brand costs £20 less in a recognized store. We take the trouble to save money. Above all, we reward ourselves by putting this amount in our savings account.
3. Separate account
We ask our financial institution to withdraw a savings of £25-£50 every two weeks. It’s a good old trick,” says Piter Blain. If we are too tempted to touch it, we transfer the money to another bank. “Unless something unexpected happens, we keep the discipline of not taking it from inside.
Tip: The important thing is not the amount set aside, but rather consistency!
Many jobs offer basic salaries with bonuses. “We keep our salary for life and put some of our bonuses into an emergency fund,” adds the counsellor. Some employers cover cell phone and mileage costs. If you keep £50 in an emergency fund or TFSA every month, after six months you’ll have £500.
5. Tax Return
If we contribute to RRSPs this year, we keep the same discipline in mind. We avoid succumbing to the temptation to go south in March with our income tax return. We put one part aside and put the other back into an RRSP. It is a matter of ensuring our financial security at 70 or 80 years of age. Unless we want to work all our lives.
In conclusion, Piter Blain recommends spending 21 days practicing budgeting. That’s the number of days it takes to change a habit. It all becomes a question of discipline. “By having a goal, we finally see the light at the end of the tunnel,” he explains.
And then, what a relief it is to pay a bill in cash without using credit.
Things to remember
In his office, Piter Blain meets people who used to earn £50,000 and now have to live on £25,000. They are learning to cut back on their lifestyle. It’s like a pendulum swing. The more you spend on things you don’t necessarily need, the less you have to save.