Last week, I wrote about how a simple switch of insurance providers has helped me save $100 per month. This week, and as promised in my aforementioned article, I am going to cover in more details about how I am spending this saved money. While $100 may not seem like a lot to some, when you think of it in annual terms, that is an extra $1,200, not an insignificant amount at all.
First and foremost, as I have emphasized for some time now, you should treat any extra money in your budget—whether from a salary increase or expense reduction—as an opportunity for saving and investing. Instead of spending the extra money on unnecessary items, it’s much better to save and invest it. By doing so, you allow it to compound over time, increasing your future returns and giving you an earlier shot at financial freedom.
To begin with, I increased contributions to all three of the company’s savings and matching programs, including an RRSP, stock purchase plan, and pension plan. These contributions are matched by my employer up to a certain percentage, so this extra money helped me get closer to the full match.
Next, I increased other budget items, including the amount allocated for travel savings, considering our family’s growth. I also raised the contributions to another personal savings plan. Last but not least, I increased the funds allocated to a discount web broker, primarily used to buy index ETFs on a bi-weekly basis.
And lastly, I created a new category to save money for upcoming social events, such as family birthdays, weddings, and more. This allows me to plan ahead and set aside funds specifically for these occasions, ensuring I can celebrate without financial stress. By budgeting for these events, I can enjoy them to the fullest and maintain my overall financial health. This proactive approach helps me stay organized and prepared for life’s special moments.
In conclusion, reallocating the $100 saved from switching insurance providers has allowed me to make significant strides towards financial stability and growth. By prioritizing saving and investing, increasing contributions to company-matched programs, and planning for future expenses, I am maximizing the benefits of this extra money. This strategic approach not only enhances my financial well-being but also ensures I am prepared for both expected and unexpected events, reinforcing the importance of thoughtful budgeting and long-term planning.