City-data personal finance budgeting and sticking to it isn’t popular or glamorous, but it’s the only way to stay in control of our money. Yes, there are sacrifices to be made – forgoing our daily latte or a new pair of boots, for example – but we don’t tighten our belts for anything. When we control our finances, stress decreases, the relationship improves and suddenly even the craziest plans, like this trip to the West Indies, become possible. How do we get there? We asked two experts to examine a bank statement, a grocery bill, and a credit card account to spot pitfalls to avoid and best practices to adopt. By following their recommendations, one can save thousands of dollars annually, with little or no pain. Here are their analyzes.
Our tips for avoiding waste and unnecessary expenses.
1 . For each transaction in our bank account, our banking institution charges fees. The more operations you do, the more you pay. “To minimize these costs, we get a monthly plan that includes a number of transactions,” advises McSween.
2 . Life insurance, disability insurance, mortgage loan insurance, critical illness insurance … A lot of people are overinsured, our experts note. “The use of insurance is not to make our heirs millionaires, but to cover us against bad luck,” says McSween. Hence the importance of periodically reviewing our needs in this area.
3 . We avoid withdrawing money from ATMs that are not from our banking institution. Interbank fees can be as high as $ 4 per transaction!
4 . We are sure to save by participating in an automatic withdrawal program that contributes directly to our TFSA, RRSP or RESP account. “For good financial discipline, we must consider savings as an expense item like any other, not reducible,” suggests Ms. Arnould.
5 . Housing costs, which include the mortgage, property and school taxes, heat, and electricity, according to financial planners, should account for about 32% of the family budget. If it’s much more, we should review our housing situation.
6 . Savings of up to 15% on the overall bill can be made by purchasing only fresh, non-taxable products, rather than processed products, which are taxable, such as, among others, soft drinks, carbonated water, snack foods, single-serve processed products, such as donuts, and prepared foods, such as hot chicken. To have a healthy budget, we favor fresh products.
For many Americans, home buying is simply a waste of money. You could spend years paying thousands of dollars of interest on a mortgage, never reap the full tax benefits and never see enough appreciation to make it worthwhile. ... But there's nothing wrong in having a home. Buying it may not make the most financial sense.
Renting is not a waste of money. Sure, giving your money to the landlord may mean you're not investing in homeownership. But you're paying to live somewhere! And as long as you're paying to live, your money is being well spent.
Renting is not throwing away money. You are paying for a service which is a place to live.
If the answer is less than five years, you're probably better off renting. In general, it's best to buy when you have your eye on the horizon and you're thinking long-term. Experts largely agree that you shouldn't own unless you plan on staying in the home for at least five years.
Unless you are extremely unlucky and buy into a collapsing real estate market, your home will go up in value over time and, in many markets, will do better than inflation. ... Your home is not going to double in value in three years. That doesn't mean that it won't steadily increase in value in the future.