It’s never too late – 6 simple ways to get your financial act together

It’s never too late – 6 simple ways to get your financial act together

Long time readers of this blog know that we try and do a few things really well when it comes to money management (instead of trying to be the perfect saver or investor).  That’s because nobody is perfect, there is no perfect savings plan or investing plan, and there is no perfect portfolio.

I believe BIG changes should start small.  Small changes need practice.  Any goals in life need more than hope.

In this light it’s really never too late to change your relationship with money.  Here are six simple ways to get your financial act together.

  1. Track your spending

Lame?  Some might say so.

Powerful?  Yes.

Find out where all your money goes.  As the old saying goes you can’t manage what you don’t measure.  

In tracking your spending, this doesn’t mean you have to cut back your spending but I think you’ll find you’ll want to in some areas once you do the math.

Start small on this one.  Meaning, try tracking your spending over a week or two for starters.  Use things like your credit card statement, online bank statement, a spreadsheet or this cool app called $pendee (no affiliation) I learned about to help you out.

  1. Automate your savings

Consider setting up an automatic transfer of your income to an existing or new savings account.  Even a dollar amount of $5 per day will help – which can really add up over many months.

Author  note – did you know investing a measly $5 per day for 30 years earning a modest rate of return will grow to over $150,000!?

If your goal is not investing, that’s fine. It’s your money after all.  My point is small, routine money transfers can be used to establish an emergency fund or park savings for future short-term expenses like a great debt-free trip.

  1. Calculate your net worth

While I don’t think you should obsess over your net worth I do believe this calculation will provide you with a good financial snapshot of where you are at a given point in time.  We recently did this calculation.  We were pleasantly surprised by the result.  I figure after we slay the mortgage dragon we’ll be in far better shape.

  1. Trim spending in one area – this year

Once you know how much you’re spending (see #1) you can consider what value this spending adds to your life – and cut back in areas that don’t.

Maybe you love nice dinners out?  All good.  We do too.  However to offset a nice dinner out every month (something we value) we cut back in other areas.  We take our lunches to work as much as we can.  We’ve made our home more energy efficient – saving money on heat and hydro costs.

I would urge you to trim spending in just one area, this year; how you could save more money each month:

  • Look at your home insurance, car insurance; consider owning term life insurance
  • Look at your home utility costs such as heat, hydro, water and telcos; consider how to cut back.

Again, some small changes can mean some big savings over time.

Now while small changes are good – at the end of the day though it’s probably far more important to get the big purchases in life right.  This means never paying too much money for a house and not buying fancy new cars often.

What’s my big purchase affordability test?

Unless you can save at minimum 10% of your net income off the top every month for your future self, you probably can’t afford the big house and you can’t afford the new shiny car.

  1. Set one short-term savings goal

Figure out this one question this year:  what do I want my money for?

Is it for travel?

It is for something new around the house?

It is for a small shopping spree?

It could be for all of these things…and good on you.

Setting one short-term savings goal (and realizing it) will get you into a great habit of saving for others in the future.  Good habits are also hard to break.

  1. Identify just one investing account and learn about in detail

Not sure if you should contribute to a Tax Free Savings Account (TFSA)?  What the heck is a TFSA and what can you put into it?

Wondering if the tax-deferred Registered Retirement Savings Plan (RRSP) is right for you?

Curious about the Registered Education Savings Plan (RESP) to support your kids’ education needs?

There are many accounts vying for your attention.  Consider picking just one of these accounts to learn more about it in greater detail over the next year.  Don’t try and boil the ocean – again – start small.  Taking time to read up on just one of these accounts likely won’t cost you anything and if anything, it might save you thousands of dollars in saving and investing mistakes.

Closing thoughts

Money management doesn’t have to be complicated but changing your behaviour is never easy. This is why acting on any one of these areas above will definitely help.  Good luck and let me know how you do (or what you have done) to change your ways.

Nobody is perfect and you don’t have to be to get your financial act together.

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

16 Responses to "It’s never too late – 6 simple ways to get your financial act together"

  1. This is a great place to start Mark! I’ve been kicking around the idea of doing an annual expense audit once per year. For one month, I would focus on pricing out all my services and seeing if there is a cheaper cost option for similar quality of services. Now that I have all my insurance needs settled and the house purchase is behind us, I am thinking it is a great time to start since there are not any big purchases on the horizon. Insurance companies will have a full portfolio of services to price out and I won’t get a sudden surprise if I would have added a service.

    Thanks for the read!


  2. Tracking your spending is very helpful I find, I do it the old school way in my day planner and write what I spent each day (or if I don’t spend then I don’t write anything) and tally it up at the end of the week and again at the end of the month. I find it more helpful than looking at credit card statements or even on my Mint app I think because it is more conscious (pen and paper) that way.

  3. Great post on the fundamentals, Mark. I can’t for the life of me understand why the basics like this aren’t taught in high school, here in Canada.

  4. To build a sound and secured financial future for oneself, the first step tis to look at one’s money habit and discipline. I definitely agree that by starting to save small amounts on a regular basis and gradually increasing the amount saved will help people develop their saving habit.

    I often like to boost my savings by getting free money from governments or employers. If you qualify for any free money join the program and get the free money, your savings will grow a lot faster than just saving your money alone.

    1. Good point. If you’re getting “free money” in terms of RRSP-matching from your employer OR government-enabled RESP grants then definitely read up and learn about that. I often wonder if most Canadian parents know about the powerful features of the RESP? Meaning, if they had to choose between their kids’ education fund or contributing to your own TFSA I wonder if they would know the features?

      I probably know the answer. Thanks for reading Leo.

  5. Re: #1: Tracking spending for a couple weeks is a very great idea. Not spending is even better. I often do weeks of spending only 20 bucks. It balances off the bad weeks when I hit Home Depot and buy stuff I think I really need but don’t.

    1. Fair point Kip. I think you need to find your own triggers points, what tactics best trigger your change in behaviour. I’ve learned keeping savings and investing funds automatic works for us. This way, we know what is left in the tank to spend per se. Using cash for us is also good.

  6. In other words, it’s not “personal” finance, it’s just finance; businesses do pretty much all the same things. Run your household like a business.

    re: I believe BIG changes should start small.
    Or, big changes are the result of small actions. Half a degree off course won’t cause much damage in a month, but it’s a disaster after 30 years. The opposite is true — small actions won’t seem like much after a month, but cumulated after 30 years…as you stated: “$5 per day for 30 years earning a modest rate of return will grow to over $150,000”. Then again, who wants to wait 30 years to retire?! 😉

    1. Yup. In other words, be the CEO of your household. Unfortunately as you know SST most Canadians don’t understand business basics and would struggle to apply those practices to their own life. It’s not that they haven’t heard of these things but unfortunately bad behaviour gets in the way. You need carrots and consequences usually to change behaviour.

  7. An excellent primer for the many out there who need help with their finances, and who have the interest and discipline to learn and do something about it. Good luck to all those looking to improve their financial standing.

    1. Agreed. Those are the things that came to mind for me. Basic tracking, NW calculations, making savings automatic, etc. Heck, if I did all those six things consistently (since my 20s) I know I would be better off!! 🙂


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