Have you ever wanted to set yourself up to pretty much have anything you’ve ever wanted? Put your kids through post secondary education without putting yourself in debt? Have that dream home? Retiring comfortable without financial stress? Well I’m going to tell you that this is possible! However you must truly want it. Here are a few important steps to get in control of your financial destiny.
- Create a monthly budget.
There are many pre built budgets you can use through either excel or google drive. Find one that works for you. For me this was the most challenging step, as you get to see where each and every hard earned dollar goes. Find a budget sheet that has both projection and actual. I say that because sometimes we think we know where our money goes, then you put in the actual numbers at the end of the month and reality shows you may be way off. Don’t worry! This is a good thing even if it doesn’t make you feel good because it lets you know where you’re at. As months pass you will get better and better at your projections. It took me over a year to get close, as there are many costs that I did not account for, birthday gifts, registration fees, kids growing faster than weeds etc.
- Pay yourself first
Once you have created your monthly budget it is crucial that you pay yourself first. For example. Each time my wife and I get paid, a certain percentage gets moved into RRSP, TFSA and the savings account. By doing this we have made that small step that is crucial to our financial destiny. Whatever is left covers everything else. Depending on your situation the percentage may vary.
- Analyze your budget and look for opportunities
What I mean by this is simple. Look at every single cost you have, from your cable bill, grocery costs, phone bill, you get the point. See if there are opportunities to lower some of these expenses. My wife and I did this and saved thousands of dollars annually. I will share a couple examples with you. The one we saved the most with was home and auto insurance, we found a broker that did all the cost shopping for us and we reduced our annual cost by over $1,500. Another was our cable bill, we called them and negotiated. We ended up reducing our bill by $55/month. One that we did without making a call was by simply turning the lights off when we were not in the room and reducing the temperature, mainly at night, we both like it cooler when we are sleeping anyway. By doing this our bill dropped $70/month. Just 3 items that we pay monthly we were able to save over $3,000/year.
- What are we going to do with the money we once paid to someone else?
Most people think I’m going to say we saved every penny however although we did save part of it we also believe it’s important to enjoy some of it now. So this year some of the money went to our trip to Anaheim. We decided to stay a few extra days as we were here on business and brought the kids to Disneyland.
- When should you start?
Now! Start now! The sooner you take control of your own financial destiny the quicker you will get there. Once you have your budget set and under control you can set your long term goals. If that’s 1, 5 or 10 years out! More on long term goals in a future post.
Invest in yourself