Three Personal Finance Basics to Master Today

Are you under a great deal of financial strain lately? You are not alone. A 2019 survey indicates that almost 40% of Canadians under 65 are struggling financially. The situation has become more challenging lately. Fortunately, money management does not have to be complicated. You can get your money under control by understanding and mastering just a few basics.

Budgets

Creating a budget, or spending plan is the first step toward better money management. First, figure out where your money is going now. Keep a spending journal to track expenditures for at least a month. At the end of the month, sort your spending. Typical categories include:

• Mortgage or rent
• Utility bills
• Groceries
• Cell phone service
• Clothing
• Transportation
• Dining out
• Recreation and entertainment

If your total spending adds up to more than your income, you will need to make some adjustments. A word of caution: Do not make unrealistic changes. Adjust spending by 10% or less in each category, or you may find it too difficult to sustain. If you get frustrated, you may give up on budgeting completely.

Short-term Loans

No matter how carefully you budget, you may occasionally face an expense you did not foresee. Vehicle repairs can easily cost over $1000, which can be difficult to come up with on short notice. Other unexpected bills include veterinarian visits and home repairs. You may need a relatively small amount of money, but any sudden expense can cause a huge amount of stress.

Getting approved for conventional bank loans can be a lengthy process, and a frustrating one if you have no credit history or a bad credit rating. Fortunately, installment loans in Canada have a simple application process. Funds are typically available within 24 hours, sometimes sooner. There are advantages to using this type of short-term personal loan. Rates are often lower than payday loans. Also, unlike payday loans, you can spread repayment out over a few months, rather than using most of your next paycheck to cover the loan. The extra time can help you avoid the payday loan cycle.

Savings Accounts

When you are struggling with financial matters, it may seem impossible to save. However, saving money can be almost effortless. You should be able to set aside $10-20 each week if you make it a priority. Set up an automatic transfer from your debit to your savings account. Because it is such a small amount, you may not even miss it. Best of all, in setting up this one transfer, you will create a habit of saving. The lump-sum is nice, but the habit is priceless.