Parents’ budgeting tips: Five ways to help you save

Your parents have spent many years budgeting, saving money, and managing debt. They know how to set priorities and understand what worked and didn’t work for them in the past. If you sit down with your parents, they might have a lot of valuable ideas and pieces of advice to help you save money. Here’s a list of five tips you might hear from them:

1. Don’t spend what you don’t have

While this idea seems simple, it can be difficult to accomplish — especially with credit cards, which make it easy to charge your spending and worry about paying the balance later. Set an amount that you can use to pay off your credit card each month and don’t go over the limit to avoid spending money that you might not have in the future.

2. Pay with cash

While you don’t have to live on a cash-only basis forever, it can be a great idea to try for awhile. Living on cash gives you to opportunity to understand the amount you spend on day-to-day items and will enable you to notice expensive purchases.

3. Set up an emergency account

Life is full of surprises — and some of them cost money. You might find yourself dealing with emergencies such as a roof leak, unexpected car repair, layoff, or injury. Make sure you set aside a small percentage of your paycheque to deal with these emergencies.

4. Align your savings with your goals

When you set up an emergency account with your bank, consider starting other accounts as well. Online banking makes this process easy. You can set up a vacation fund and put money in each month to achieve a five-year goal of travelling out of the country. Or maybe you want to start an account dedicated to repairs and maintenance around the house.

Having separate banking buckets will not only help you prioritize your savings. It will also provide you with encouragement as you start to see your savings start to add up over time from your dedicated efforts.

5. Create and follow your budget

A budget is an ever-changing task — and you may never spend exactly what you think you’re going to spend. Sometimes it’s more, sometimes it’s less. The important thing is to review what you’ve spent and decide if you’d like to make changes.

Nobody can judge where you spend your money. If you are happy with your results, you’re doing it right. However, if you would like to make changes, you might need to make some other decisions. You may need to take on a part-time job to pay off your debts or save for a vacation.

If you live in an area where people throw away a lot of plastic bottles, ask around to see if anyone minds if you take them and keep the cash. The effort required is minimal, but it provides some extra cash for your savings.

Take the next steps

If you are struggling with financial stress and you need some help understanding your debt relief options, contact a Licensed Insolvency Trustee (LIT). LITs can assess your financial situation and help you understand all your debt relief options so that you can make the best decision for your unique situation. Together, we can help you achieve a fresh financial start.