As of today, we are officially in the home stretch to Christmas, with only 12 days to go, we hope you’re taking some time to relax, hang out with those you love, and make sure your finances are on track so you can finish out the year with no debt and minimal money related stress. Since it’s the season of giving, if we could gift all our readers a fluffy new winter scarf or a soft new pair of slippers, we would. But, since that’s a bit out of our price range, we’re going to give you something that’s free, or depending on how you look at it, it could be worth quite a lot for you.
Here are our top 12 (one for each day until Christmas and in no particular order) personal finance truths. Money related tips that everyone, no matter where they are in life and no matter how much money they make or have saved, should without a doubt follow.
P.S. If you really want to end the year on a good note, follow along and complete each of the tips by Christmas Eve.
December 13th – Get Organized
If you’re not organized and you don’t know where all your paperwork is, how many bills you pay each month, or even how many credit cards you have, you’ll never be able to truly commit yourself to making your financial health a priority.
December 14th – Set up Automatic Contributions
This is a big one and while we don’t like to play favourites with our money tips, this one would definitely win. Saving is hard; because it’s more fun to not save and simply because it can be hard to remember to save when you have to deal with dozens of other issues in a day. This is why setting up automatic contributions to your savings account(s) is one of the best decisions you could ever make for your finances.
Set them up, $10, $50, or $100 a week, whatever you can afford, do it. Because once you set it them up you never have to think about it again (unless of course, you want to increase your contribution, which we totally recommend that you do). Let’s say you set up automatic contributions for $100 a month, after one year you’ll have saved $1200. Would you have been able to save that much just by remembering to transfer any leftover cash you might have at the end of each month? Probably not.
December 15th – Pay Your Credit Card Bill When it Arrives
We know this can be hard, especially around the holiday season, but as soon as your credit card bill comes in, pay it off in full. Make paying off your credit card a habit, this way you’ll be less likely to carry a balance month to month.
If you have credit card debt that you’re currently struggling with, this tip probably isn’t for you. But there are many things you can do to improve your financial situation and make this year the year you finally start conquering your debt (see next tip).
December 16th – Consider Getting Help With Debt Management
Asking for help when your debt has become too much for you to handle does not mean you’ve failed, it means you’re ready to get back on track and deal with it. This year can be the year you create a budget, devise a plan, and get the help you need.
Take a look at this infographic; it will help you decide which debt management option is best for your needs.
December 17th – Figure Out How to Get a Free Chequing Account
We recently just discussed, in length, Canadian banking fees (you can read that article here) and how banking is not in any way a free service. But, the good news is, there are ways to make it free or at least as inexpensive as possible. Look at your bank’s website and see how you can get a free chequing account, you’ll be saving upwards of $40 a month which is basically like paying yourself an extra $40 a month. Because most banks have different ways of charging fees for the services they provide you’ll need to figure this out based on what bank you use.
December 18th – Understand What After-Tax Income Means
After-tax income in the amount of income you actually take home after taxes and all other deductions. When you purchase something, you’re spending after-tax money, money that you had to work really hard for. Understanding this concept may help you value your time and your money a little bit more. So that the next time you want to purchase something that you don’t actually need, think about how much of your time it takes to produce the after-tax income needed to purchase the item in question.
December 19th – Have More Than One Form of Savings
One savings account is great, two is even better, and three is excellent. Chances are you aren’t only saving for one thing; you’re probably saving for many things, all with varying importance. Your retirement savings might be the most important for you, but it’s also a long-term commitment so you’ll need to have an RRSP or TFSA for that. If you’re planning on going on a nice vacation in the New Year, then you’ll need another account for that because it’s a short-term commitment. Organization is key when it comes to saving, multiple accounts will allow you to see your progress and hopefully motivate you to continue to save.
Check out our Essential Guide for Saving.
December 20th – Cut Back on Unnecessary Fixed Expenses
What is an unnecessary fixed expense you ask? It’s one of those bills you pay every single month without fail and you probably even think it’s a necessary expense. But in reality, you undoubtedly don’t need it and you definitely don’t need to be paying for it. Here are a few examples of what we mean:
- A way too expensive phone bill or a landline (do you ever really use your landline?)
- A super deluxe cable or satellite package (aren’t you always on Netflix anyway?)
- A gym membership (when was the last time you went regularly?)
Cutting back on one or even all of these expenses will save you hundreds of dollars a year. Take a look at your bills and see what you can cut out for good.
December 21st – Learn to File Your Own Taxes
If you have an income and therefore need to file income taxes each year, you should figure out how to do them yourself. Obviously, there are exceptions as some individual’s income taxes can be quite complicated. But, if your taxes are relatively straight forward, learn how to file them yourself. It’s a great skill to have and you’ll save a bit of money as you won’t need to hire someone to do them for you.
December 22nd – Spend Less (or Way Less) Than You Make
This is budgeting in its most basic form, spend less than you make and you’ll have some money left over to save. Spend more than you make and you’ll be in debt for a very long time.
Want to learn how to create a budget that works for you? Click here.
December 23rd – Choose One Unnecessary Expense to Give up
While this may seem similar to our “cut back on unnecessary fixed expenses” tip, it’s a bit different. This time we want you to cut out one unnecessary expense what you know you don’t need and that you get stressed out about every time you spend money on it. Dinner out every day of the week or gourmet coffee to get you over midday slump, whatever it is, we know that you all have at least one expense that you both love and hate. It’s an indulgence that makes you feel better in the moment but then stresses you out at the end of the month when you get your bank statement and see how many hundreds of dollars you spent at your local coffee shop.
December 24th – Check Your Credit Score
If you want to have a healthy financial life and good credit, you need to know what you’re working with. We know that checking your credit score can seem intimidating, especially if you don’t know how to check it or if you know it’s lower than you’d like it to be. But, it’s important to check your credit at least once a year. Checking your credit score and requesting a copy of your credit report (learn how to read your credit report here) will allow you to see all of your credit accounts, understand what standing they’re in, and finally, make sure that there are no issues or instances of fraud. All of this is very important if you’re trying to improve your credit score or maintain a healthy financial life.
