Finance

Easy money hacks that can save you thousands of dollars a year

Being a single mom living off 55% of my income with zero financial support from my son’s father has made me a pro at saving money. I’ve always loved budgeting, but continuing to pay my mortgage, all my bills, buy groceries, and still have a little leftover for other needs has been a whole new level of challenging.

I have to give my parents a lot of credit here for making it easier on me than it might’ve been if they’d raised me differently. But despite making a sh*tload of money, my mom and dad raised us in a modest house, drove used cars, and didn’t wear expensive clothing. They chose, instead, to save money for our education, take us on vacations, and retire at a young age so they could relax and enjoy a good chunk of their adult lives.

With models like Larry and Carolyn, I had a definite advantage when it came time to pare down my spending. But I know that it’s not this easy for everyone.

If you’re ready to start taking control of your spending habits, here are my favourite, most basic and easy ways that I save thousands of dollars a year compared to the average Canadian.

Put your cell phone down

Canadian cell phone bills are among the top 3 most expensive in the world. Though this might not seem fair, it’s unfortunately our reality.

Speaking of phone plans, WTF? With my current provider, a phone like the iPhone X has a minimum plan cost of $105 a month! That plan comes with 4 gigs of data and 500 Canada-wide minutes. I understand that newer phones use more data, but if you need 4 GB every month, it might be time to consider spending less time on your phone, or at least restricting the amount of time you spend on your phone when you have no WiFi access. By using an older phone off contract and using less data, you can slash your phone bill in half.

Smartphones themselves also cost an arm and a leg — the 64 GB iPhone X is an astounding $1275! That’s the same price as their 11-inch MacBook Air, just to put that into perspective. If you spread the cost out over two years, that’s a $400 down payment and an extra $36 a month on top of your phone plan, not including interest charges for financing.

I know it’s tempting to upgrade your phone every two years when it’s paid off and you’re off contract, but it’s going to cost you twice as much to do that. $105/month means you’re spending a grand total of $1260/year on your phone, and that’s not including the extra charges your provider throws in on top. If you can even stretch your phone out one extra year, you’ll save yourself $600. Use that phone for two more years and you’ll have enough money to buy a brand new phone outright and be off plan again for the next few years!

Switch to no-fee banking

According to Statistics Canada, the average Canadian spends $200 a year on banking fees. What do you really get for that money? How often do you actually talk to someone from your bank face-to-face?

One of the things I love most in life is grabbing the reigns. Whether it’s taking control of my health, environmental footprint, social media consumption, or money, I love the feeling of empowerment I get from educating myself. I dig the liberation that comes from actively making decisions for my own good.

For so many years, I was passive about my finances. This led to overspending, unnecessary debt, my ex taking control of our money, and ultimately wasting hundreds (if not thousands) of dollars of my money every year.

By switching to no-fee banking, I’ve saved over $500 on banking fees in the three years I’ve had my account. With no-fee banking, you can put $60 (on the low end) to $360 (on the high end) back in your pocket every single year. To put that into perspective, if you invested just $360 a year for 5 years at 5% interest, you’d end up with almost $2500. So you can keep giving that money to the bank, or you can take a pretty nice vacation to Hawaii.

The catch with no-fee banking is that there are very few locations where you can talk to someone face-to-face. But, to be fair, there are very few situations where you need to talk to someone in person if you educate yourself just a little about banking and investing. Everything else about it is super easy and convenient: Tangerine offers unlimited ATM withdrawals at Scotiabank ATMs, photo chequing deposits, and even free cash withdrawals in many countries, including Italy, New Zealand, Peru, and the US (click here for the full list of countries). So if you love to travel, you should definitely consider opening a Tangerine account!

If you use my Orange Key 44456268S1 as your referral code to open an account with Tangerine (minimum $100 first deposit), they’ll pay you $50. (Full disclosure: I get paid too!) And if you sign up by October 31, 2018, they’ll give you an interest rate of 2.75% for the first six months. Click here to open your savings account, and make sure you use my Orange Key 44456268S1 and deposit $100 to get your free 50 bucks!

Drive an older car

The Power Information Network pegs the current monthly car payment on a new vehicle in Canada at $570 a month. That’s almost 20% of the average Canadian’s take-home pay, and it’s pushing $7000 a year.

This is exactly why I love driving a used vehicle. I bought my 2003 Toyota Corolla in 2008 for $10,000. I’ve been driving it for 10 years now and it’s still going strong. The first five years, my car required almost zero maintenance — in other words, it didn’t cost me a dime aside from regular upkeep like oil changes. The past five years, I’ve spent a few thousand dollars in total on repairs, but nothing close to $7000 a year.

Let’s say you spend $2000 a year for repairs on your older vehicle (which is actually on the high end for me). That’s still $5000 less per year than a car payment. Or, if you factor in the purchase cost ($10,000 spread over 10 years), it’s $4000 less. And is it really worth it? Does driving a new car really add anything to your quality of life?

What would you do with an extra $4000 a year?

Spend money on what brings you joy

I’ll admit, sometimes I see a shiny new vehicle and wish I had one too. Sometimes I wish I had a phone with a better camera. But mostly, I feel really damn good knowing that I’m only spending money on things I need, or — when I go back to work and have disposable income again — things that really bring me joy: vacations, family photos, charities that help the less-fortunate, and fun activities for Kieran and me. I also feel great knowing I’m contributing as little as I can to our throw-away society and, thus, the destruction of this beautiful planet.

There are many other little ways I save money, but these are definitely the three most important. If I had a car payment, for example, I would’ve had to end my mat leave early to return to work!

What are your favourite money-saving tricks? Let me know in the comments!

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