Mind Your Pennies

Growing up, pharmacy my life was fairly modest because we didn’t have a ton of extra cash kicking around. My parents never said we were broke or cheap, they simply said we made the most with what we had. I like to think they taught me a thing or two & because of that I’ve been pretty alright with money in my 26 years on this planet.

For people who know me, they know I don’t have a ton of “stuff.” I don’t have a collection of handbags or a never-ending closet of clothes, I spend money on making memories. I would rather spend money on having wine with girlfriends, beers with boys & sporadically jumping on, or out of, airplanes. Don’t get me wrong, I’m far from perfect. My friends like to remind me that I spent a little less than $1k on tickets to Farewell Rexall, took a blind date &…that’s another story, for another time.

Make a budget (or just know where your money is going)

Print out your bank & credit card statements for the last 3 months & review how much your spending in each category. If you don’t like the pen to paper method, sign up for a free service like www.mint.com that will analyze your bank accounts, spending habits, etc. When you’re getting used to sticking to a budget, www.mint.com is a great tool. I don’t use it very often anymore, but it’s great to see how my net worth has grown over time & analyzes how much I sporadically spend – like Farewell Rexall tickets.

Don’t walk away from a penny

When I was 20, an extremely successful businessman told me if you won’t stop to pick up a penny, you’ll never make your first million. So yes, I’m the person who will stop mid conversation to pick a dime up off the sidewalk. But it’s more than just picking up loose change. It’s about being conscious of every dollar in & every dollar out. It’s the little purchases that add up, because you might see it as $2 here & there, but in reality, it’s putting you in the red.

Think about every time you go to an ATM; you’re literally throwing money in the garbage. If you think the $2.50-$4 per transaction isn’t a big deal, consider this: if you do this every weekend for a month, it’s your Netflix subscription. Over the course of a year, it’s a great pair of shoes. Just plan ahead & stop at your bank for cash. Then take it one step further & bring coffee from home every once in awhile instead of grabbing a $6 latte.

It’ll add up, I promise.

Take advantage of loyalty programs

Loyalty programs are the way to go! These programs allow you to get ROI on things you spend money on every day (gas, groceries, etc). It goes back to the principle of picking up a penny; why walk past it when you can put it in your pocket?

Are you an Air Miles collector? Fuel up at Shell & get your groceries at Sobeys/Safeway. Aeroplan collector? Fill up at Esso & fly Air Canada. While you’re at it, check their websites once a month for extra point coupons & current promotions. Remember, points on most loyalty programs are transferrable. For example, my HSBC points get automatically converted to Air Miles & I convert my Wyndham rewards to Aeroplan.

Thanks to loyalty programs, I rarely pay for flights & the extra points I have get traded in for Ticketmaster gift cards. To the boy who bickered with me about Air Miles & inspired this blog post – you’re missing out on a free baseball game or two every year you don’t sign up. 

Earn money while you spend it

What if I told you that you could get cash back on stuff you buy all the time? Not a gift card & not in exchange for a product. Here’s the catch with these things though, if you use them, don’t just deposit the cheques back into your checking account when you receive them – put them against your debt, or lock it up in a savings account you can’t touch. Promise?

If you shop online, ever, you need an Ebates account. It’s a free, click through website which allows you to get cash back quarterly on stuff you already purchase.   

http://www.ebates.ca/referrer?referrerid=DucAyVuvsxI%3D%0D%0A

Checkout 51 – Do you buy groceries? Yeah, silly question. Download the app & upload your grocery receipts. Once you bank over $20 you can request a cheque & every week you have the opportunity to win $500. www.checkout51.com

P.S. Are you shopping where you can take advantage of loyalty programs?

Bulk Buying

Because I’m single & live on my own, Costco doesn’t usually make sense for me, especially with perishable food. If you normally wouldn’t go through that pack size in a reasonable length of time, is there really a point to buying that much to save 50 cents? Here’s why it’s not, you’re tying up cashflow. Think of your bank account like a business, by tying up cash in your pantry, you’re limiting the equity you have available in an emergency.

Go look in your pantry & do a rough count of how much money is tied up on your shelves & how long it would take you to go through all of those items realistically. Could you stand to lose a little bulk in exchange for money sitting in a Tax Free Savings Account, making interest & available in an emergency? For me, I don’t like to have more than a couple weeks worth of pantry shenanigans kicking around. Yes, I buy paper towel & other stuff at Costco. But unless I go with a partner in crime who wants to split pack sizes, I avoid tying up potentially hundreds of dollars in my pantry.

Credit cards

Even though I am pretty OK with money, I can’t afford 20% interest. So if you’re reading this to be better with your money, you probably can’t either. If you carry a balance right now, pay it off as soon as you can. If you’re not good with credit, talk to your bank about consolidating your debt & cut up the cards. I would keep one for emergencies, but don’t carry it with you so you’re tempted to use it. I froze mine in a block of ice during college so I wouldn’t be tempted to impulsively buy hockey tickets; seriously, I’ve always had a problem.

Back to loyalty programs. There are a ton of no annual fee credit cards out there that offer reward systems or cash back. Also, if you don’t use your credit card often, but you use one with an annual fee, you should do the math & see if its worth what you pay annually

Re-evaluate your mandatories

Remember when I said to make a budget & know where your money is going? Time to look at some of those payments & see if you can knock them down a bit. Don’t leave money on the sidewalk.

  • Home & Auto Insurance – Because I’m a SAIT Polytechnic grad, I get 20% off my policies with TD Insurance.
  • Look up the benefits on your credit cards. Rather than purchasing travel insurance, you might have free coverage as long as you booked your vacation with that credit card. You might get a preferred rate at certain hotels or car rental agencies.
  • Energy bill – switching providers might save you on the rate & offer you a better loyalty program; Enmax offers EasyMax Rewards & Direct Energy offers Aeroplan.
  • Mortgage/Loan/LOC rates – even a partial percent drop can mean hundreds or thousands over time, make an appointment with your bank & shop around.
  • Is your car constantly breaking down & costing you repairs? Maybe it’s time to replace it (remember to price out insurance changes, gas consumption (including fuel type), etc.
  • Paying for cable when you stream all your favourite shows? Call & cancel it yesterday.
  • Do you need the super upgraded internet or can you step down a level or two & save $10-30/month without sacrificing a ton of speed/data you don’t need or use.
  • Still subscribing to a magazine you don’t actually sit down & read? Cancel it. Or if you truly want to keep subscribing to it, find a girlfriend who reads the same stuff & share the subscriptions.
  • If you’re the only one on your Netflix account, find another single bud & share that subscription too.

Just by switching insurance companies alone, I saved $780/year & I did it all from my deck, drinking a glass of Malbec. So take a little time & see what you can save.

Don’t spend what you save

This step is the hardest to do. But in my opinion, it makes the biggest difference. The mentality is this, every time you save a dollar, put that dollar against debt or savings. For example, when I go out for a night with friends, I grab the amount of cash I’m willing to spend for the night & head out. When I get home at the end of the night, anything left over is tossed in a wine bottle for future vacations. It’s also a subconscious way of saving because I think twice about ordering another $15 glass of wine or putting $15 towards my next vacation. When I go to the grocery store with $100 & only spend $80, I put the leftover $20 into savings. It changes the way you think about spending money & in return, helps you save more of it.

Don’t become infatuated with making more money, it will make you miserable. Just commit to making it go a little further by minding your pennies. Maybe you’ll have enough to say “Hello” to Rogers Place in October! 

Leave a Reply

Your email address will not be published. Required fields are marked *