Monday, December 28, 2020
50 Budget Hacks for 2021
We all want more money, but finding extra cash at the end of the month can be difficult. There are only two ways to have more money every month: You can either make more money or spend less money. Let’s focus on the second one. I give you my 50 Budget Hacks for 2021. Get a pen and pad and let’s get started.
1) No Fee Banking
Bank fees are a complete waste of your money. Most banks have a minimum balance you can maintain to have no monthly fees. This amount, usually between $2,000 and $5,000, can also serve as your new mini-emergency fund. Those sweethearts at the bank will even give you a free book of cheques if you keep this balance in your account. As if anyone uses cheques anymore.
2) Never Use Overdraft
Beyond the fact that you are dipping below zero on your accounts, using overdraft carries a hefty fee. This fee is anywhere from $20 to $50 a month, even if you only go one dollar below zero. Make a vow to keep a minimum balance far above zero and you will never need to go into overdraft. Maybe choose an amount that gives you no-fee banking. See point 1.
3) Pay off Your Credit Cards
Most credit cards have an interest rate of 19.99%. Those pesky department store cards may even have a rate of up to 29%! I don’t know about you, but I don’t like paying interest for 87 years. Paying off your cards gives you monthly cash flow and most importantly, peace of mind. You can’t put a price on that.
4) Cut up Your Credit Cards
Now once you have paid off your cards, if you know you can’t fight the temptation of using them, cut them up. An all-cash or debit diet is not a bad thing. It keeps you in check and will guarantee you never go into consumer debt again.
5) Cut Your Cable
Cable companies charge a fortune now for their services. Even worse, the bill mysteriously goes up without you knowing at times. Streaming your shows can save you a lot of money every month. You may even be more productive by getting your face in front of a book instead of a screen.
6) Shop Your Cell Phone Plan
Cell phone companies are notorious for treating new customers, better than existing ones. As time goes on your bill creeps up higher and higher. A way to combat this is to always be a new customer. No one provider deserves your loyalty. Every year shop around. As the marketplace becomes more competitive, your bill will be cheaper and cheaper.
7) Never Buy the Newest Phone
Hey look it’s the new iPhone 53. It has 5 cameras and a toaster over-attachment. Getting the newest phone that comes out is an absolute waste of money. They cost a fortune and the changes from the last model are always minor and not worth the cost. Buy a year or two down model and you won’t notice a difference, I promise you.
8) Drop the Added Phone Charges
For the life of me, I will never understand why anyone would purchase an app. Even worse is when people purchase cell phone games. Cell phones cost enough on a regular basis and now you add monthly charges for the newest version of Angry Birds? Keep your cell phone costs slim.
9) Get Unlimited Internet/Data
If you have a habit of going over your allotted amount of internet usage or data, get yourself an unlimited plan. While the plan may be more expensive, the overage charges are far more expensive than that. Reign in your usage or get the unlimited plan. Don’t be a sucker for Rogers.
10) Get Rid of Your Home Phone
Does anyone even have one of these anymore? Unless you want duct cleaning sales calls every day, drop this antiquated nonsense.
11) Declutter Your Home
Living messy often translates to your finances being messy too. More stuff equals more money. Prescribe to the minimalist life and you will watch your bank account grow. You can, and should, always give unused items to the needy.
12) Sell Your Stuff
Piggybacking off the last point, getting rid of crap can be profitable. Kijiji, eBay, and Facebook Marketplace are full of items being bought and sold daily. Turn the stuff you never use into cash in your pocket. Hey, you might even use it to build that minimum bank balance or pay off debt.
13) Quell Your Online Shopping Addiction
This one has been popping up more and more lately. With the rise of Covid, we have turned to the internet for our shopping needs. Sadly for some, it has meant that they are overspending and going into debt. Amazon does not need more of your money and if the UPS or FedEx person knows you by name, you may have a problem. It may be time to revisit point 4 if this is you.
14) Trim Your Subscriptions
Nagging small subscription amounts that automatically come out every month are annoying and can really add up. Go over your credit card and banking statements to see where you are spending money every month and trim the fat. Things like online magazines, music apps, and protection plans are the major culprits.
15) Give Up Prime
Tying into the last two points, Amazon Prime to me is a waste. Even more deadly is the notifications you constantly get, urging you to take advantage of new deals or items. We knock Jeff Bezos for being uber-rich and then we subscribe to junk like this and make him richer. Let’s be smarter people.
16) Drop the Gym
Unless you go there on a regular basis of course. If you are going less than two times a week you might be better paying a one-time drop-in fee. Even better you might be better just working out at home or around the neighborhood. I heard a stat that over 50% of gym memberships go unused. That is a scary figure.
17) Make Your Own Protein Shake
1 Scoop of protein, $0.60. One banana, $0.32. A handful of berries, $0.63. A squirt of milk, $0.09. Where did the $8 shake come from? This is a ridiculous overreach and if you are buying these on the regular, stop it.
18) Make Your Own Coffee
We all love a freshly made coffee from our local barista, but the cost is pretty outrageous. 2 regular coffees a day equals $5. Times 5 days a week equals $100 a month. If you are not putting $100 a month into savings yet you “NEED” your coffee on the outside, you messed up. Brew a pot at home. Bring a thermos. Save some money.
19) Drop Starbucks
2 coffees a day equals $5. How about 1 latte, with Type 2 diabetes added, costing $8. There is nothing wrong with treating yourself to a nice caffeine fix, but if you are on a daily regiment it really adds up. Be mindful of where your money is going every day.
20) Bring a Lunch
This was more of a thing when, you know, we actually went to work. While we are working from home we are eating at home, hopefully. Carry that attitude with you when we get back to normal. Buying lunch on the outside is usually between $10 and $20 a day. Don’t spend that much money every day on something that should cost a couple of bucks at most.
21) Skip Lunch
As the legend Gordon Gekko said in the 1987 movie Wall Street, “Lunch, ah you gotta be kidding. Lunch is for wimps.” Depending on your health, of course, skipping lunch may not be the worst thing. My typical lunch consists of coffee and a computer. Affordable and productive!
22) Drink Water
Soda pops, juices, and energy drinks are not only bad for you but cost a fortune. This is especially true of drinks like Red Bull. Save your money and stick to nature’s best elixir, H2O.
23) Drink Tap Water
The bottled water industry is a BILLION-DOLLAR giant that essentially bottles the water coming out of our taps. Even worse is that is the pollution generated from millions and millions of bottles floating into the ocean and clogging our landfills. Not only are you saving money, but you are saving the planet as well.
24) Turn Off the Lights
The Portuguese Princess Nelly Furtado had it right. Turn off the damn lights folks. Your electric bill every month should be as low as possible and this means not having unnecessary appliances and lights running 24/7. The price of power is only going to go up over time, so get in the habit of being energy efficient today.
25) Adjust Your Thermostat
Growing up in Canada my parents were probably thinking we were in Southern California. January 1st rang in the new year, but also the first time my Dad would put the heat on. While I do not recommend this, I also believe you should keep the heat slightly below room temperature. The same goes in the summer when your Air Conditioner can cost you a fortune. A couple of degrees of heating or cooling can save you lots of money over the year.
26) Don’t Grocery Shop While Hungry
This one I am 100% guilty of. When I grocery shop before dinner, that shopping basket turns into a shopping cart really quick. Bring a list and stick to it. Going off the rails with grocery shopping can cost you a fortune, especially if you overbuy and food goes to waste.
27) Lay Off Junk Food
Junk food relies on two simple factors for us to buy it: It’s delicious and we are addicted to it. This causes us to buy it despite the fact that it is bad for us and costs a fortune. A bag of Lay’s potato chips costs about $3. A 10-pound bag of potatoes costs about $2. If you can cut out the junk food, your wallet and your belly will thank you.
28) Organic is a Scam
The only food that I fully trust is organic, is the stuff grown in my area because I can see it as I drive by. Anything coming from a distance can be manipulated and just because they put a purple sticker on it, doesn’t mean it’s organic. It also doesn’t mean it is better for you. Let’s be honest. If you are that worried about the quality of your food, grow your own.
29) Coupon and Price Match
Now, this is something I do not have the patience to do, but wish I did. People who use coupons and price match saves hundreds if not thousands of dollars annually. Apps like Flipp make it extremely easy to do this. Stick to stores that still price match and save money on essentials. Please do us all a favor and have your app or coupons ready when you get to the front of the line. You are holding up everyone else if you are unorganized.
30) Stock up During Sales
If you have a list of essentials that don’t go bad like canned goods, cleaning supplies, toilet paper, etc., you might as well buy extra when they are on sale. Provided you have the room at your home, you can use these throughout the year and not worry about running out and having to buy them at full price. Last March when the world ran out of toilet paper, I was chilling with 4 packs in my closet from earlier sales. Winner, winner, chicken dinner.
31) Use No-Name Products
There are many No-Name products that are of terrible quality, but a whole host of others that are literally the same thing as the brand names. I even saw No-Name Beer at the store the other day. It had the traditional yellow wrapper and everything. I didn’t buy it, but if you are looking to save money on groceries, off-brand products cost substantially less.
32) Shop at Farmer’s Markets
Even more than the price of the food itself is the cost to ship it to us. If we grew bananas in Canada, they would be 3 cents a pound instead of 50. Local farmer’s markets cut out this shipping cost as the food is grown within close driving distance. Fewer preservatives are needed as well because of less travel. They also support the local economy which is never a bad thing.
33) Grow What You Can
This can be tough for us city dwellers, but if you can grow some food it is an amazingly affordable way to eat healthily. It can also be a great way to teach kids about food and give them fun activities to do on boring summer days.
34) Drink at Home
Now I love a cocktail as much as the next guy, possibly more, but I do realize that drinking at a bar is quite expensive. One major point of savings this year was outside alcohol, as bars were closed or limited much of the year. If you have a tight budget, drinking at home will save you a ton of money.
35) Limit what you Drink
I do like to have a cocktail after a long day’s work, and I do like to visit an establishment to do so. Because of this, I try to limit how many beverages I have on the outside as those costs can really add up. Instead of having 3-4, try having 1-2. You will save money and never be at risk of driving under the influence, which can cost you far, far more.
36) Brew Your Own
Wine and beer enthusiasts have often produced amazing drinks right in their own homes. I even have a client who has made his own strong cider in his kitchen! You can make large batches for virtual pennies a glass and often the difference is minimal to store-bought. Word of caution: Stay away from the Portuguese strong wine. It packs a punch.
37) Limit Your Take-Out
I am not sure about this obsession with take-out. We have replaced one expensive habit with another. We all enjoy a break from cooking but doing this on a nightly basis is overboard. Furthermore, meals like breakfast and lunch ordered from take-out are ridiculously expensive in comparison. If you are too lazy to cook a 5-minute breakfast and are willing to spend $20 to get it delivered, you deserve to be broke.
38) Cook at Home
I rarely eat meals on the outside. The reason is simple: I find very few places that make better food than me for a reasonable price. I do like a few local spots, but I mainly go to get out and not to eat. Having been in the restaurant industry for a good portion of my life I know the markup for items. I enjoy cooking and find that it is usually healthier and always more affordable. Given that I work 60+ hours a week and still find time to cook, I am sure you can too.
39) Skip the Delivery Apps
If you MUST order in, try ordering right from the restaurant itself. Apps like Skip the Dishes and Uber Eats charge a fee for their services and even if you aren’t paying it, the restaurant will be. Try picking up your food or calling the restaurant directly. They save money. You save money. Everyone’s happy.
40) Have an Emergency Fund
Having an Emergency Fund is an essential part of your personal financial plan. It prevents you from going into costly consumer debt and also gives you the peace of mind you need to sleep at night. Instead of paying costly interest by borrowing from the bank, borrow from yourself out of your Emergency Fund, and replace it as soon as possible. This method will save you thousands of dollars.
41) Set Up Auto-Payments
If you constantly miss bill payments, you will get charged late fees. For some companies, this can be substantial. You are better off having the money come right out of your account instead of trying to remember to pay the bill. Always make sure you keep a balance in your account. If you don’t, you risk going into overdraft, and that will cost you as well.
42) Set Up Auto-Deposits
If you are forgetting to put money in your savings every month, you need to set up automatic savings deposits. This can be to your emergency fund and your investment accounts. This saves you money because by automatically putting money into savings and you are growing your money consistently. You then have a place to draw from should an emergency hit, and you won’t go into costly debt.
43) Negotiate Your Mortgage
Mortgage rates have dropped dramatically recently and if you have not looked at your statement over the past year, I suggest you do so. Your mortgage is more than likely your largest monthly payment. It is also the most expensive thing you will ever purchase. If you can save money by negotiating your mortgage, you should do so. It can save you thousands of dollars and years off the length of your mortgage. I have helped dozens of people do this over the past year.
44) Drop the Mortgage Insurance
Not only is mortgage life insurance a waste of money, but it may also not even cover you should you die. Mortgage Life Insurance uses what is called “Post-Claim Underwriting,” which means they investigate whether you should have the coverage after the claim is made. Shouldn’t they have done that at the time of the application? On top of that, it is often more expensive. Get yourself personally owned Term Life Insurance instead. I help hundreds of people do this every year. It saves them money and also gives them peace of mind.
45) Review Your Workplace Coverage
Having a group plan at work is nice but is often filled with costly items that you may not need. Enhancing your coverage at work is rarely beneficial as you can often get similar coverage on your own for cheaper. Even more important is that if you do not work there anymore, you do not have coverage. Chances are you will still need insurance if you change jobs or retire. Drag out your paystub and benefits manual today and see what your plan costs you.
46) Develop a Spending Philosophy
There is absolutely nothing wrong with getting philosophical about your money. An example would be an “anti-bank” ideology or even an “anti-big business” mindset. These types of approaches, while often annoying to others and preachy, save you money. If you vow not to waste a dollar at certain things in life, you will not waste a dollar. That’s one more dollar you have, and the “evil empire” doesn’t.
47) Stop Spoiling Your Kids
Let’s be honest, no one likes spoiled kids. You are only obligated to put food in their belly, a roof over their head, and clothes on their back. Beyond that, it is a personal choice. Maybe you should spoil them with an inheritance instead of Air Jordan’s when they are 7 years old. They will be thankful later, and the rest of the world will thank you now for not having to deal with your little brats thinking they own the world.
48) Celebrate Festivus
I proposed a new Covid Christmas Campaign this year. I suggested we tell children Christmas was canceled due to the pandemic. We would probably have to do it again next year, but then after a few years, the world would have moved on from the holiday. My idea didn’t pick up steam, despite the genius nature of it. Nevertheless, stop celebrating meaningless holidays folks. While Christmas might not be meaningless, it does not have to break the bank. Good times with friends and family is all you need.
49) F*** The Joneses
I think as Covid has dragged on we have become less vain. It could be the lack of haircuts and not needing to put on pants to go to work. I hope this anti-vanity trend continues once we get back to normal. No one cares about your fancy new toy, your brand-new cabinets, your cool new outfit, or your trip to Cancun. No one cares about your PS5, especially your girlfriend. When you do something, do it for you. Don’t do it to impress others. When I see a brand-new BMW, I don’t see a nice car. I see absurd monthly payments.
50) Change Your Mindset
I speak with hundreds of people a year and discuss their most personal financial details. I noticed that the people that are better off with their money, genuinely care about their money choices. They don’t waste money on garbage. They save, invest, and pay down debt. They put in work and then reap the rewards instead of wanting everything right now. We are incredibly lucky to live in this part of the world. It has afforded us a comfortable existence. What it has not given us, and NEVER will, is a remarkable life. If we want a remarkable life, we must do remarkable things. Luckily for us, all we must do is work hard and make the right choices along the way. If you adopt this mindset and kill the outside noise, you will be successful in life and with money. It is that simple. Nothing is given to us; we must earn it. The question then becomes: What have you earned?
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