Month: December 2024

The new year starts in a few days. If improving your financial life is one of your goals, then you should probably consider implementing atleast one of the following tips. As always, take what you need and leave the rest. After all, you’re the person who is best-placed to know the intimate details of your financial life. That makes you the expert on which tips will work and which ones won’t.

Cook your own food more often.

You know what you like to eat. Thanks to the internet, there’s somebody out there who has already made a video of how to prepare your favourite things. Watch the videos and learn to make it yourself. You’ll spend a little bit more time and effort, but your wallet will thank you.

I know that most recipes are written to generate multiple servings. If you’re not a fan of leftovers, then freeze the extra portions. They will be there waiting for you when you’re too tired to cook. Having food waiting for you at home limits the need to stop at a restaurant or to use a food delivery service.

If you’re not used to cooking, start small. Make some muffins and take one with you when you know you’ll be needing a snack later. If you’re a fan of pancakes or waffles, make a batch on your day off and then you’ll have them waiting for you each morning for breakfast.

After awhile, you’ll also notice that your own food tastes better than what you can buy elsewhere. You’ll start to ask yourself why you’re paying to eat something that’s not as tasty as what you can feed yourself.

If something’s holding you back from cooking for yourself, figure out a way to overcome it. Food is not getting any cheaper. Cooking it for yourself is one way to keep your food costs down.

Have a no-spend day each week.

This can be tricky, but it works. Pick one day a week to spend nothing. It doesn’t matter to me what day it is. The purpose of this tip is to force you to be mindful of how often you open your wallet or use your phone to pay for things. Are you engaged in mindless spending? If so, is it one of your goals to stop this habit?

Bring a snack to work. Stay home. Read a book instead of scrolling retailers’ websites. Do whatever you want to do so long as it doesn’t involve you incurring any expenses. Remind yourself that retailers will always take your money tomorrow.

Maybe you legitimately have to spend money every day. Find ways to cut down the amount. Maybe you’re used to spending $40 every day. Do what you can to reduce that amount on atleast one day a week. If you can cut the amount by half, so much the better for you.

Increase your contributions by 1%.

In my humble opinion, this is the tip that’s really going to propel you towards your financial goals. It’s deceptively simple, yet its impact is powerful.

Whatever percentage of your income that you’re currently investing should be increased by 1%. This is a fast and easy way to insure that you’re increasing the amount being contributed to your financial goals. No one else cares about your money as much as you do. Let’s face facts. It’s up to you to fund your retirement, to build an emergency fund, and to ensure that your sinking funds get filled. That means being smart with how you organize and allocate your money.

Ideally, you’ll fill your TFSA first. Once that’s done, work on filling your RRSP. After both are maxed out, you can open a non-registered investment account and start investing that way. Increasing your contributions by 1% every year means that you’ll max out the TFSA and RRSP sooner. Once that’s done, you’ll have even more money working for you sooner in your investment account. Money needs time to compound. The sooner you can contribute more money, the better compounding will work for you.

It’s math. The more you save, the faster you’ll fill up your TFSA and your RRSP. These are registered accounts that have limits. Once you’ve hit those limits, you can invest everything else in your non-registered investment account since there is no limit on this account.

Again, I don’t know the details of your financial life. If you’re starting from scratch, then it will take you longer to accomplish these feats than someone who’s been working on these goals for the last 10 years. It doesn’t matter how long it takes to max out your accounts. It will take as long as it takes. The important thing is to start today and to stay focused on your goals.

That’s it.

Use these tips as you see fit. It’s your money and you’re the one who gets to decide how it’s spent. My tips have helped me get into the Double Comma Club, so I’m sharing them with you if that’s a club where you’d also like to be a member.

Long-time readers know that I enjoy talking about how to make your dreams come true. I truly believe that one of money’s best purposes is to help you build a life that makes your heart sing, one that puts a smile on your face. Prioritizing your spending in order to achieve your most important life’s goals significantly increases the odds that you’ll achieve the dreams you have for your life.

Today, I want to spend some time talking about the security side of money. You’ve heard me talk about emergency funds, sinking funds, and investment funds. Those are all very important too. But last week I heard about a new-to-me nickname for a cash security blanket. It’s called a SWAN account and it stands for Sleep Well At Night.

I was hooked.

Nothing new under the sun.

Sure, this is a new name for an old-fashioned idea. But it’s catchy and I like swans, so I’m going to talk about it in this post. The account’s purpose is in its name. A SWAN account is there so that you can sleep well at night. You get to decide how much you need in the account to achieve your goal.

If you don’t already have one, it’s very easy to set one up. Go to your bank and open a savings account. Maybe you eventually want to have $50,000 set aside to sleep well at night. That’s not an insignificant sum, and it’s rather intimidating to think of saving that much money all at once. Here’s the secret…

You don’t have to save it up all at once. You can set smaller savings targets that will eventually get you to your ultimate goal. Create mini-savings goals. Your first mini-goal could be to get $100 in there. When that’s done, set another goal for $300. The next goal can be $700. And so on and so on and so on until you hit your ultimate goal.

Guess what else? You also get to pick the amount of money that goes into you SWAN account from every paycheque. Obviously, the more you save, the faster you get to you ultimate goal of whatever amount you choose. Track your spending. Figure out if there are any non-essential expenditures that don’t bring you joy. If so, then resolve to not make those purchases in the future and send that money to your SWAN account.

Saving, not investing.

Notice that I’m specifically referring to saving this money. I’m not suggesting that you invest it for long-term growth. Your SWAN account is designed to be a safety net in case things go drastically wrong and you need to lay hands on money within hours. Your invested-for-the-future money resides in your TFSA, your RRSP, and your non-registered brokerage accounts. Money invested for your future needs to be left alone to do its thing so that it’s ready and waiting for you when you decide to retire. Hear me when I say that your invested money doesn’t get used except as a very last resort.

The SWAN account is strictly a savings account. Open a high-yield savings account and start stuffing it with cash. As always, use an automatic transfer from your paycheque to your SWAN account. Let technology do the heavy lifting for you while you’re out and about living life.

The SWAN account is the moat between your current circumstances and your invested funds. The bigger that account is, the less likely you’ll be forced to sell your investments to cover the cost of your necessities. It’s time to start building your moat. Continue to set mini-goals for yourself and do what needs to be done to achieve them. Eventually, you’ll have a nice-sized SWAN account and you’ll be sleeping like a baby once again.