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Key takeaways:
Remember the days of balancing a chequebook? Anyone?
In today’s world of autopay, cash apps, direct deposit and tap-to-pay, it can be difficult to keep track of where and when money is coming and going. How does a world without handling cash affect how we look at and spend money?
Years ago, it was unthinkable to leave the house without money in your wallet; now, some places won’t even touch it. From the coffee shop to the grocery store, we often don’t need more than a smartphone in our pockets to make our purchases for the day. Having credit cards, e-commerce apps, cash apps and bank accounts all accessible from our devices has lightened our load and made the world a pretty convenient place to shop. But has it ever happened that you’re about to go out for brunch and check your balance online only to find your account is lower than you expected?
How can we continue to take advantage of these modern conveniences without breaking the bank (or wanting to break our phones)? The answer is easy — KEEP TRACK! But how,
Before you can keep track of your money, you must first understand how much you have to work with. Without having a budget in place, it’s nearly impossible to know when to tap that phone for a latte or when to keep it safely tucked in your bag.
This is where Scotia Smart Money by Advice+ comes in. If you’re a Scotiabank client, this handy feature on the Scotia Mobile app helps you build and manage your budget, keeps you informed of your bills and transactions and gives you a clear picture of your cash flow.*
Once you better understand how much you have and how much needs to go out monthly, you can see what you have left and how you want to slice that financial pie.
A helpful way to look at your money is with the 50-20-30 rule in mind:
- 50% of your income towards necessary things like rent or mortgage, food, transportation
- 20% towards your savings, like a HISA
- 30% for other wants and needs
This can include travel, dinner with friends or money you want to put into an additional savings account, perhaps for a new car or a Forget You fund.
Budgeting is an essential step that can help you reach your financial goals... and maintain your peace of mind as you decide to buy that concert ticket. It’s the best way to avoid those low-balance surprises and keep your path to financial well-being ever so smooth.
How do you avoid the embarrassment of a rejected card at your best friend’s birthday dinner, or that upsetting feeling of finding out that you’re six days away from that next paycheque and you’re already strapped? It’s time to keep track of your finances. This will help you discover spending habits you weren’t otherwise aware of. Becoming more mindful of how those casual purchases add up helps you to think twice about that casual smartphone tapping.
Great! You're on board with tracking… but how?
There are countless options here, from keeping receipts to recording purchases in a spending log or Excel spreadsheet to using tracking apps on your device. If you’re highly likely to make most of your purchases on your device, an app may be the way to go. Scotia Smart Money is an easy way for Scotia clients to understand exactly where their money is currently going through its insights, budgeting and cashflow management features.
Whatever method you choose, make it easy and accessible enough so it becomes a habit.
Setting a monthly reminder to review your expenses gives you the opportunity to re-evaluate your budget. It can help you to notice spending patterns and identify areas where you can cut back if necessary. Maybe there are some opportunities to put a little extra whipped cream on that slice of savings pie. Checking in regularly allows you to avoid overspending or debt, make healthier, better-informed financial decisions and, perhaps, identify ways to save. Your efforts will feel worth it when you reach those goals quicker and maintain that sense of financial well-being.
With our busy lives, convenient shopping is great, but overspending is not. But now that your awareness of these tapping pitfalls is on high, and you’re tracking your spending, what else can you do?
You may have found that taking these initial steps has helped you reign in some casual unnecessary spending, so this is an excellent time to look to the future. Whether that means investing, saving for a larger purchase down the road or starting early on to set yourself up for those golden years, set some new financial goals for yourself.
Keeping track of your spending and financial planning may sound, well, boring, but once you build up good habits, you can also get closer to achieving your financial goals. So set a few attainable confidence-building goals for yourself, and then get out that glue stick and some scissors and craft the vision board of your dreams.
