Seven tips to manage your finances in 2024

The new year is here — and one of your resolutions may include improving your finances in 2024. Inflation and interest rates have both increased over the previous year, and it’s essential to ensure you have enough to cover your rent, utilities, groceries, gas, and other household expenses. You also want to have enough money left over at the end of the month to spend on items you want or save for expensive purchases while making sure your finances don’t spiral out of control.

The following tips can help you get started on managing your finances in 2024:

1. Create a budget

A budget is a plan that helps you manage your money and reach your financial goals. It includes not only your household expenses, bills, and debt payments — but also saving for major purchases such as a new vehicle or a vacation. Your budget acts as the foundation to help you reach your financial goals by helping you to understand where your money is coming from and how you are spending it each month. This helps you to prioritize your spending, increase your savings, and reduce your financial stress

2. Track and review your expenses

You need to stick to your budget and make improvements throughout the year to reach your financial goals. You can get started by holding onto all your receipts and bills to track where and how you are spending your money each month. Enter your expenses into a journal or a spreadsheet, or use budgeting apps such as Mint, PocketGuard, or those offered by your bank to keep track of your spending. Review your expenses at the end of each month and compare it to your budget to evaluate whether you need to reduce your spending or update the figures to make it more realistic.

3. Avoid overspending

Sometimes you may want to purchase an exciting product or experience — such as a new television or tickets for a hockey game. However, you risk overspending and not having anything left at the end of the month if you make these large purchases without checking your budget first. Review your budget to determine whether you can adjust the monthly amount you have set aside to other areas to cover your purchase. It may be best to wait until you save up enough money for the item you want if you are unable to redirect funds from other areas of your budget.

4. Shop for groceries online

Many people go grocery shopping with the intention of only buying a few items — but leave the store with many more than expected. Buying groceries online not only saves time, but also helps you avoid impulsive purchases to ensure you stick with your monthly budget. It also helps you save on transportation costs and allows you to easily compare prices between different stores to find the best deals. Additionally, online shopping enables you to review the final price before you check out, which makes it easier to adjust to stay within your budget.

5. Pay off your credit card every month

If you use a credit card to make your purchases, it is important to ensure that you set aside enough money to pay it off on time each month. This helps you avoid paying high interest charges on unpaid balances and builds your credit score. Paying off your balance each month also helps prevent a cycle of debt, helps you avoid late payment fees, and creates healthy credit habits to improve your overall financial health.

6. Set up an emergency fund

An emergency fund helps ensure you can handle unexpected expenses without going into debt. It is important to not rely on credit to cover emergency situations such as a vehicle repair or medical procedure since you will be paying interest on the loan. Try to save enough to cover at least three to six months of your income or your regular household expenses. You can get started by setting aside a small regular amount each month in a separate bank account and including this amount in your budget.

7. Reward yourself when you reach your goals

It takes a lot of discipline to stay on top of your finances. Take the time to reward yourself when you reach your goals — such as by buying a new pair of shoes, a bottle of wine, or by going out for a meal at your favourite restaurant. However, remember to be mindful of how much you are spending. Plan these rewards into your budget so that you have enough set aside to treat yourself without overspending when you reach your financial goals.

Take control of your finances

It can be challenging to manage your finances — and these seven tips can help you gain control of your spending and relieve financial stress in 2024. However, many Canadians are still struggling with debt as inflation makes the price of daily necessities more expensive and high interest rates increase the cost of debt.

Contact a professional if you are feeling overwhelmed by debt or financial stress. Our Licensed Insolvency Trustees (LITs) can help you review all your options and choose the debt relief solution that works best for your specific situation. Together, we can help you take control of your financial future.