Each year, products and services become more expensive because of inflation, it is inevitable. Quebec’s government also has taken the habit of raising taxes annually during the last couple of years. When you are done paying basic expenses such as rent, Internet, cable, cell phone, etc., it feels like you have emptied your bank account. You need to manage your income efficiently to pay all your bills on time and be able to sustain an unfortunate event such as a job loss. In this article, we will give you 3 tips to manage your money efficiently.
Prepare a Budget… and Follow it Thoroughly.
Your first reaction might be to say that making a budget is useless since there isn’t any money left in your wallet once you have paid all your living expenses. However, if you take the time to create a structured budget, you may find out that you do have some money left after all your expenses are paid. To start you can open a checking account online to see what money you have after you pay your bills.
You can opt to follow a weekly, bi-weekly or monthly budget to track your income and expenses. In our opinion, a budget cycle that is synchronized with your pay period (which usually are every week or every 2 weeks) will make it easier for you to manage.
Do Not Always Buy the Highest Priced Product That You Can Afford Theoretically
One advice that you may have heard at least once is ‘’Do not live over what you can afford’’. While you should absolutely try to follow this advice, we think the most important advice that you should follow is this one : ‘’Do not spend the maximum you can afford in theory’’. A great example of this is when you want to take a mortgage to buy a house. Your bank may grant you a 400 000$ loan, but you should look for a cheaper house in order to take a smaller loan. Why should you do this? Because when you bank authorizes a certain amount you can borrow, it does not take into account certain life events that have a direct impact on your financial situation such as losing your job or a surprise pregnancy. If you settle on a less expensive house, you will have money to invest or save.
Meet an Accountant or a Financial Advisor
Accountants and financial advisors are great people to meet when working on a budget. Indeed, they are highly knowledgeable people about how to deal with money. Financial advisors will help you to optimize your finances and save money while Chartered Professional Accountants provide a wide range of accounting services such as estate planning and tax planning.
This concludes this article on 3 tips to manage your money efficiently. We hope that reading this article has motivated you to set up a budget. If you are in the metropolitan area, contact an expert in accounting services in Montreal.