Learn how proper money management can bring freedom.

Date: November 4, 2020

Can you imagine how free you would feel if you had $100,000? How about $1,000,000? In contrast, if you have nothing in the bank, even if you’re working, you are trapped.

I once counselled a couple with a mortgage, two cars, and two young children. They filed a consumer proposal on about $50,000 of debt. Four years later, I asked them how they were doing. The measure is always the savings account. They had $48,000 in their savings account. They still had a small amount owing on their proposal. I asked them. “Why don’t you just pay out your proposal?” They told me, “No! We love having money in the bank. We will have over $50,000 saved very soon!” That’s nearly a $100,000 turnaround in four years. They figured it out.

I know another man who couldn’t retire because he had too much debt. He filed a consumer proposal. We corrected his spending habits. Three years later, he had $27,000 saved and he was about to go to California to visit his son for the first time in many years. He had never had the financial FREEDOM to do it before.

You can do it too!

I wrote earlier about the danger of “treading water.” You’re surviving but you’re not going anywhere. And if you’re over your head in debt, unexpected expenses will put you underwater and in danger.

People set goals to lose weight, to get in shape. Here, our ultimate goal is financial security, but let’s start with saving $2,000 in the next 12 months.

Most of us are familiar with SMART goal setting. It stands for:

S – Specific – the goal to be achieved is clearly defined: $2,000 saved in one year.

M – Measurable – progress has to be measurable: $167 saved every month.

A – Achievable – it’s challenging but possible: a change in priorities can result in $167 savings per month.

R – Relevant – saving $2,000 will significantly improve your financial health.

T – Time frame – setting a target of approximately $5.50 a day, $38.50 a week, $167 a month will achieve your goal in one year.

How to save $167 or more a month:

  • Take lunch to work.
  • Cut out or cut down on takeout coffee. Make it at home and take it in a nice Thermos. Flipping a switch on a coffee maker takes 5 seconds and costs 5 cents. Buying takeout coffee takes 10 minutes and costs $2, if not more.
  • Check cable and phone plans and cut where you can.
  • Eating out is a treat, not a routine. Spoil yourself at the supermarket – it will be better for you and much cheaper.
  • Have a drink at home with friends instead of going to a bar.
  • Plan every meal. Don’t get caught at the mall at lunchtime.
  • Don’t go shopping when you’re bored. Find something more meaningful to do.
  • Find free activities to do with your children. Spend time with them, not money.
  • Generosity and kindness are good, but don’t be taken advantage of. Don’t be your extended family’s ATM.
  • Make purchases based on needs, not wants.
  • Make children’s snacks at home instead of buying at a store. Learn how to make healthy cookies.
  • Don’t compare yourself. What you see can be very deceiving. Focus on your own wealth only.

I’m sure you can look at your own spending and find even more ways to cut back on needless outlay. The key to success is to train your mind to take joy from saving money. When you reach your daily, weekly, monthly goals, feel good about it. It’s not going to be a straight line. There will be unexpected expenses that will affect a weekly goal – but make it up the following week. As your bank account grows, so will your self-esteem and pride. Most of you will save more than $2,000 a year once you get going.

Time to set your next goal !!