The federal government recently announced some budget cuts, including eliminating the penny, cuts to the Employment Insurance program and the CBC, reduced services in federal parks, Old Age Security increase in age, and more. The Manitoba government recently announced some tax increases: fuel tax, cigarette taxes, provincial sales tax on haircuts and other services, tax on some insurance (home and group health) and more.
I’m not going to provide an opinion on all of those, but how is your budget? The federal and provincial governments have deficits they need to get under control. Deficits occur when a government (federal, provincial, municipal) or any other organization (or family) spends more than the revenue they receive (the governments get it from us tax payers). Governments can only continue deficits for so long (the annual deficits accumulate and become the debt and then we are in real trouble: I’m sure you’ve heard about what’s happening in Greece and other European countries).
So what can you do about your own spending? I found some samples from the SunLife.ca website on how we can reduce our own spending. Here are some ideas and I added a couple of my own.
Do you grab a coffee every day on the way to work? If your morning trip to work involves a stop for that large double-double, your caffeine fix is costing you about $330 a year. Considering brewing your own (we found it cheaper to buy the expensive Tim Horton’s ground coffee and make our own).
How about lunch? If the majority of your lunchtime conversations include “would you like to make that a combo?” consider packing your own lunch from time to time. Grabbing lunch on the go four times a week could be costing you $1400 a year or more.
You CAN win if you don’t play! I admit to buying the lottery tickets occasionally when the jackpot gets really big, but if you are buying two tickets every week, you could pocket $416 a year by keeping the money in your own pocket.
Are you stopping at another bank’s (credit union, caisse) automated banking machine? The additional $1.50 to $2 in extra fees may seem small, but if you do this every week, it’s adding up to $100 in extra charges per year.
How many credit cards do you have? If you have enough credit cards in your wallet to deal out a hand or two of Texas Hold’em, it’s probably time to think about consolidating your debts. Cancel all but one of your credit cards and make sure you pay off the balance each month. Or look into debt consolidation to lower your interest payments further. If your bank won’t help you consolidate your debts, look into a local company called Credit Aid.
300 channels and still nothing on? Ask yourself whether your $800+ a year cable/satellite package is worth it. Re-visit your package and if you can get by with fewer channels, streamline your selections to make sure you’re getting better value for your money.
Taking the family for a night out at the movies? After ticket prices, drinks and snacks, you could easily be looking at spending $60 or more. Do that once a month over the year and you’ve spent $720. Consider going to a matinee performance and grab a snack at home before heading out, or stay home and rent a movie.
If you find yourself buying two or three magazines a month from the store, it can cost you upwards of $200 a year. Consider purchasing subscriptions for the magazines you read most and you’ll realize savings of 50 or 70% or more. Now that’s a good story!
If you thought gas was expensive, just be thankful your car isn’t running on bottled water! At vending machine prices, you could be paying more than $2 a litre. Even if you buy just one bottle a day, you’re still pouring over $300 a year away. Fill up at your tap instead or buy in bulk and bring your own water with you.
Charges for long-distance calls, cell phone usage, texting and system fees can all add up quickly. Look for more affordable alternatives: consider pay-as-you-go plans, call outside of peak hours, get a family plan, or whatever it takes to bring your costs down.
Saving fuel is always a good way to save money too. Just slow down. By reducing your speed by 10% (105 instead of 115 kmh) you do save money. And drive more conservatively. Be gentle on the accelerator.
What are your ideas for reducing expenses? Share your ideas – I’ll print them next month. Just call me, or email, or drop off a note at my office.
Anni Markmann is a professional tax preparer and a certified financial planner working, living, and volunteering in our community. Contact her at 422-6631 or firstname.lastname@example.org or at her new location at 36 Dawson Road in Ste Anne.