Part 1 – Get Rid of the Junk

COVID-19 forced millions of people to be at home with not much to do and many people are turned to deep cleaning their homes. If you find yourself with more time on your hands, consider doing a deep-clean of your ‘financial house’ as well.

Hundreds of blogs and websites will help you deep-clean your house. Most share a few common themes; de-clutter and get rid of junk, work from room to room, and get organized.  In this three-part series, we will adopt these recommendations to deep-clean your financial house.

Start with the Junk

In life, we tend to accumulate items in our houses that we don’t use anymore. These form clutter, collect dust and weigh us down. The same can also apply to our financial lives.  For this article, financial clutter will be defined as regular expenses, usually relatively small, that add up over time.  Let’s explore a few…

Monthly Subscriptions

• Do you subscribe to some online music/movie/TV services?  Do you find that you use one more than others?  Consider dropping what you don’t use.

• Do you have cable or satellite?  Will switching providers be cheaper? Can it be bundled with your phone or the Internet?  With everything available online, can you get away without it altogether?

• Do you read the newspaper that you pay for or do you get your news online?  Consider if you should cancel newspaper or magazine subscriptions.

• Does the cell phone plan you have fit your needs?  Speak with your service provider to discuss if there is a different monthly plan that would be a better fit for you or your family’s usage.

• Are you paying for a telephone landline when everyone in the household has a cell phone?

Banking Fees

Although these are generally small, if you add them up over a year they can add up to a lot. Talk to your bank (or to another bank) about your monthly banking fees.  They should be able to assess your monthly transactions and provide you with a plan that best fits your needs while minimizing your usage fees.

Alternatively, if your banking needs are quite simple, there are ‘online’ banks with zero monthly fees that are worth considering.

Personal Comforts and Vices

• One $2 medium cup of coffee per day adds up to over $700 per year. Making it yourself for, say, $0.50 per cup can save you nearly $400 per year. Saving $1.50 for the 5 minutes ‘work’ that it takes to make your coffee is the equivalent to paying yourself $18/hour! And, that’s for only one cup per day.

• Quit smoking! If you are stuck inside for more than a month with your routine and habits disrupted because of COVID-19, now is the time to quit! And I don’t even need to explain why.

• If quarantine/self-isolation has taught you anything, it’s that you don’t need to dine out or go to the movies as much as you used to.

• Do you enjoy alcohol? Explore the idea of making it yourself? While it is still illegal to make moonshine, there are several ways to make your own beer or wine.

Individually, these small things likely don’t disrupt your day-to-day financial well-being. However, when you view them on a yearly timeline, they quickly become big numbers. Look at your financial house and get rid of the clutter and junk. Next time, we will tackle the bigger things when we start focusing room-by-room on your financial house. Follow us for Part 2 next week.

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We offer free consultations to review your financial situation and practical debt resolution options. Contact us to discuss your situation over the phone, a video chat, or in person in Saint John, Moncton, Fredericton, Charlottetown, Dartmouth, or Miramichi.