Posts tagged ‘saving’

Creating financial goals can help you get there easier, but there is an even better way!

One of my goals for 2022 is to get active with push-ups. To be more specific, I set to do 10 push-ups a day and increase that by 1 extra push-up per month. So for January, I started with 10 a day and I have since increased that to 11 a day for February. For March I will raise that to 12 a day and so on. The idea is to increase things while not shocking the system. I couldn’t just go from 10 push-ups a day in January to 20 in February. For those familiar with the ‘boiling frog syndrome’ , this should make sense.

You can apply the same ‘ladder’ approach to your finances, be it to save money or pay down debt.

Saving money

You can apply this in many different ways. You can start by saving a specific amount of your net pay and increase it by a specific amount or percentage each paycheque thereafter. Or, you can set it so that you are increasing it by 25% per quarter. So if you are starting with $100 saving bi-weekly in Jan, by April 1st, you increase that to $125, then $156 by July and so on. If this proves complicated , you can stick to the easier method of increasing it by a set amount. Alternatively, you can try out a more interesting method, where you increase your contributions based on the month. So starting in Jan with $100, you increase it to $120 in Feb (since Feb is the second month) and by the time you get to December, you will be saving $220.

Paying debt

Paying debt is similar to saving money, but instead of keeping it to yourself, you are paying it back to banks for borrowing their money. Here, too, it is key to set financial goals and fine-tune them as you go. Depending on your debt level, start off by dedicating a certain amount to pay off toward your balance and aim to increase that periodically. This could be done as aggressively as every paycheck , every quarter of however you want to set it. The key is to increase it periodically. Every increase will go a long way towards paying off your balance quicker, while saving on the interest.

Depending on what your financial goals are, start off by writing it down and being clear about what your current situation is and where you want to be. Next, set a timeline. And finally, decided how much you will set aside and how much to increase it by, and how often. It is magical what happens when you are specific, have a specific timeline, and add the power of compounding to it.

New Saving Idea for 2022: ‘Junk to Health to Wealth‘

I am no slave to junk food. I may eat it once or twice a week, sometimes with the family. But despite it not being a daily habit, it still goes a long way towards causing damage to both my pocket and health, especially with the rising prices for food of late.

So for 2022, I have a new saving goal in mind, which will help improve two hugely important areas of my life: my pocket and my heart, both in an almost literal sense.

Junk to Health to Wealth

The idea is simple: on the days I know I would go out and eat junk (usually over the weekend) I will withhold those purchases and instead save that money. At first, I thought I would just keep the money and spend it on something else, since it was part of my ‘personal spending money’ anyway. But I thought it is more effective if I diverted this saved money to a new saving program or even into a piggy bank. Why? To be able to physically see the result of this diversion initiative. In other words, in 6 months or 1 year from now, I will not only be able to go on the scale and see a difference in my weight , I should also realize some nice financial savings from this junk food boycott or reduction.

Putting it in OKR terminology

If you are thinking this in terms of ‘Objectives and Key Results’ , it could read something like this:

Objective: (based on historical data of how often I ate at junk food places and how much I spend) : To save $500 a year and reduce my weight by 7 lbs for the year by reducing how often I frequent these places.

Key results:

  • Visit max of once a week (from two)
  • Spend a max of $7.50 a visit
  • Skip at least once a month from the remaining regular visits.

If I eliminate my visits from 2 to 1 visit a week , this alone would result into savings of $375 per year, based on 50 weeks. If I can also eliminate one extra visit per month, that is another $90, putting me close to my goal of saving $500 from this ‘Junk to Health to Wealth‘ initiative.

While the numbers look clear and the advantages are numerous, this will not be without challenges and distractions. There will be those random days and weeks where you are out with the family and are too far from home or can’t wait , so you just do the easy thing and buy junk. That is fine. We should almost build those in and try to make up by skipping the next visit to eat junk.

Good luck if you decide to do this and let us in the comments below how it goes.

Netflix, Starbucks, Amazon: the axis of time, money and space misuse

Netflix-Starbucks-Amazon : they waste your time, money and space!

Finance books and literature love to use Starbucks and their expensive lattes (I admit, I don’t know what they cost and had to do some digging) as the perfect metaphor for money we habitually waste instead of saving it for something more useful in the future. And while it is not the end of the world to enjoy your favourite drink occasionally, especially on those cold snowy days where nothing else seems to do the trick to get you going, the steep price can quickly add up!

And while Starbucks and their lattes are used as metaphors for careless spending, we have others in this axis of personal waste. Netflix (and a whole host of other online apps like Instagram and Tiktok) , are starting to be blended into their own category: time wasters. AKA binge watching! A lot of you have been there: you watch Netflix or YouTube (me!) and before you know it, a whole hour (or half a day?) has passed by. And what do we have to show for it? Almost nothing in terms of productivity or return on personal development.

But here is a new one! What about Amazon (or your favourite online retailer) now being the ultimate space (and money of course) waster? With majority of our online shopping (proudly doesn’t apply to me other than buying books on Kindle that take no space) now taking place via Amazon, chances are a lot of homes and bedrooms are full of junk from Amazon. Ok, junk may be extreme as some of the stuff people buy on Amazon is useful (books, household essentials, new camera etc) but there is certainly lots of useless stuff that just sits there and doesn’t get used much, eventually becoming junk and taking up space. And this is even more prominent for Amazon Prime members (one of which happens to be a family member) . A friend of mine who also happens to be a Prime member, tells me that not a week goes by without one or more packages arriving from Amazon. And he has been a Prime member for years and years. Tell me his house is not full of Amazon junk by now?

As I said, I am proud to be the user of virtually none of this axis of money/time/space black-hole. Sure, there are the extreme odd times when I will use these sparingly or under special situations. Compare that to someone who uses all three:

($CAD pricing)

-Average of 3 Lattes per week (tall size) + 2 food item = $20 per week, or around $1040 or more a year

-Netflix: $17.99 a month = $216 annually

-Prime membership: $110 annually
Average of 1 purchase a week at $20 = $1040 annually

>>Total adds up to just under $2500! And that is not even counting money actually spent buying stuff on Amazon which is easily in the high hundreds, or thousands for a lot of people.

To some, this may be justified as it allows them access to three of their favourite things in life. But as we talked about earlier, these are more than just bad for your finance, but can be just as bad if not worse for robbing you of much needed time and space. And as we know, both are worth money. Time is money. And so is space, especially in our ever shrinking homes and condos.

There is time for everything. And while you can enjoy all the above, I feel like with these becoming a daily verb in our society and lexicon, some people are losing sight of how much they are wasting in terms of money, time and space to these big corporations.