Tools to help you live within your means

November 6, 2017

By Jane Rooney, Canada’s Financial Literacy Leader

Welcome to week 2 of Financial Literacy Month! This week’s sub-theme is “Live within your means.” This is a foundational habit that can help you achieve financial well-being.

There’s no question: when money is tight, it can be very challenging to spend less than you earn. It can be a struggle to keep up, especially on a low income. Still, financial challenges can open a door to doing things differently. The question people often have is, ‘How do I get started?’

A budget is a good place to start. A budget is a simple but highly effective way to make sure you spend less than you earn. Having a budget that lays out sources of income and monthly expenses can help you commit to a spending plan, determine your needs versus your wants, set priorities for making purchases, and establish a plan to pay down debt and save for the future.  

The Financial Consumer Agency of Canada’s (FCAC) Budget Calculator is a great tool for people just starting out or seasoned budgeters. This calculator can help you manage your finances by helping you identify where your money is going and determine how much you can put toward your goals. 

Once you have a budget, you have a better idea what your spending priorities are. Now it’s important to keep track of where your money is going, and to avoid unnecessary fees and costs.

One way to do this is to choose a credit card with conditions and terms that suit your needs. Those terms – and especially the interest on the card - can make a big difference to your budget. If you choose your credit card wisely and pay the balance every month, you can avoid high interest payments and also establish a good credit history. You can use FCAC’s Credit Card Comparison Tool to find the card that suits your needs.

Likewise, it’s important to shop around for your financial services to ensure you get the right ones for your situation, and avoid unnecessary or hidden fees. Did you know that some financial institutions offer no-cost or low-cost bank accounts? You can use FCAC’s Account Comparison Tool to find the bank account that’s right for you.

Every stage of life has financial challenges. If you have a budget, understand how to manage credit, and choose financial products and services to meet your needs, it will help you to live within your means. This will carry you a long way toward ensuring your financial well-being. When it comes to making ends meet, it pays to know!

 

 

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