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Get A Handle On Your Expenses: Simplify And Save

I challenged readers a while back to take a day off during the week to work on their finances. That means going through recurring bills, such as cable, internet, bank fees, car insurance, and monthly subscriptions to ensure you’re getting the best bang for your buck.

You might also use the time to look for ways to earn more money, exploring opportunities to run a small side-business, switching to a more lucrative rewards credit card, or finding a better return on your savings and investments.

The main reason why I budget and track my expenses is so that I can identify potential areas to save money or simplify my finances. Over the years I’ve tried to come up with budgeting tips and strategies to help manage our household expenses – which can be tough when you’ve got a growing family to take care of!

Here are some of my favourite tips:

Simplify. You can take saving money and optimizing your finances too far where you can’t see the forest for the trees. At a certain point there’s a law of diminishing returns, where the time spent chasing additional savings can’t be justified.

Too many bank accounts, credit cards, investment accounts, and savings hacks can put stress on your time and lead to mistakes. Anyone who’s ever forgotten to pay their credit card bill on time, or had a cheque bounce or their account go into overdraft can attest to this: Sometimes the simple approach, even if it’s not 100 percent optimized, is the best approach.

Insider tip: I used to have a wallet full of rewards cards to try and maximize the cash back from every dollar I spent. I soon realized that, for simplicity’s sake, I was better off using the 1-2 rewards cards that best matched my spending.

Get cash back. Canadians love using their debit cards. Using debit to pay for your purchases sounds innocuous, but can have costly consequences.

Full service chequing accounts that include unlimited debit transactions can cost $15 per month or more. Add a separate account for your spouse and the cost doubles to $30 per month.

Insider Tip: My wife and I switched up our preferred method of payment from debit to a cash back credit card. Instead of paying monthly bank fees, we get cash back on every purchase and earn hundreds of dollars each year.

Maximize every purchase. Pretty much every store offers its own loyalty program or participates in a broader coalition program, but most of us can’t be bothered to carry around a bunch of loyalty cards or store discount cards just to save a few bucks.

However, when you combine a store loyalty program with your rewards credit card, you’re earning twice the rewards or discounts and saving more money.

For example, with a card like the SimplyCash Card from American Express you’ll earn 5% cash back on gas, grocery and restaurant spend for the first six months, and 1.25% on everything else. After six months, you’ll earn 1.25 percent cash back on everything you buy – all with no annual fee.

Insider tip: Gas stations are a great example; let’s say you can fill up at a local station that offers a 7 percent discount on gas purchases. If you subsequently use the SimplyCash Card, which offers 5 percent cash back on gas purchases in the first six months, you can increase your discount to 12 percent off gas!

Spend on things you enjoy. I’m not a big latte fan, but if you enjoy expensive coffee then who am I to criticize? Spend on things that bring you joy (or that save you time) and try to save money in other areas to offset your splurges.

My wife and I like to enjoy a nice bottle of wine (or two) on the weekends, but we’re not that fussed about the type of coffee we drink (we brew it at home). We also save money by planning the majority of our meals in advance and cooking at home, but we’ll splurge on dinner at a nice restaurant or a weekend excursion once in a while.

Insider tip: A great example is to use the cash back that you’ve earned on your everyday spending to treat yourself and splurge on something that you don’t get to do that often.

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4 Comments

  1. KC on November 20, 2015 at 9:45 am

    Pretty good post.

    I use PC so that eliminates any bank fees whatsoever. In addition, I have a PC Mastercard which allows me to earn 10 points for every dollar spent which goes towards free groceries. I use my everyday spending on this which works out to $400 free groceries a year.

    I also use my VISA Aventura and only use it on gas, groceries and drugstores to get 1.5x the points and can redeem it on household items that are starting to go.

    Further, I use my PC Mastercard at Loblaws gas station where I get 4 cents/L AND earn my PC points at the time time. The autocash is redeemed at groceries store giving me about $100 free groceries a year.

    I used to be a big fan of Optimum card back when the points provided real value until they’ve practically made it worthless.

    I don’t use AMEX as there are a lot of places that don’t accept it so it’s not worth bothering.

  2. JP on November 20, 2015 at 10:47 am

    KC –
    We also have a PC Mastercard but only get 2 cents/L off. Do you live in Ontario? And if so, how do you get 4 cents/L off?
    Thanks!

    • KC on November 20, 2015 at 11:23 am

      Hi JP,

      I do live in Ontario but this particular gas station offers 4 cents/L if you use PC Debit or PC Mastercard. Otherwise, it’s 2 cents/L. The same gas station next town over (10 min away) offers only 2 cents no matter what you use. Per the station attendant that offers 4 cents says it’s to help beat other competition especially since there are 2 other gas stations on same corner and 2 grocery stores very close by.

      Now, do you want to know the interesting part? During the strike at Loblaws, the gas station was still open but very empty. They offered 25 cents/L to anyone that filled up there! This wasn’t freely advertised and I only found out after I filled up. So, filling up my very empty tank in my car gave me $10 auto cash! Needless to say, I came back with a mini-van that was running on empty and got $16 autocash. That paid for 1 week of groceries! Whoohoo!

      • JP on November 24, 2015 at 9:02 am

        Where is this station? We are in Muskoka and the best we get is when the Canadian Tire has a 5 cents/l sale – the Independent gas station matches it plus the 2 cents/L.

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