Combating Quiet Spending

Tis the season. Jackie starts off this week’s solo live with bubbly Christmas music as she ushers in the holiday season. The topic is combating quiet spending, and she touches on how to close some of those loopholes that could be eating into our finances especially as we get excited about the holidays! Starting out with a big question for you: Do you have a spending plan that you stick to no matter what? Let’s dive into the conversation. 

Considering that the cost of living has increased, higher interest rates have affected many people and uncertainty in the economy means job security may be an issue moving forward, it is important to look after our finances and plan according to the times we are in. Quiet spending is also known as unconscious spending, and there are a couple of ways we do that. The first one may look like last-minute spending, buy now pay later or old habits we picked up from the pandemic like adding subscription services to our expenses. There are so many online subscriptions out there – the list is endless.  

According to a survey, lots of Canadians are worried about their spending habits but haven’t taken any action to control some of these habits. Stats show that … (51%) of Canadians are concerned about their current financial situation, but the majority have not changed their unconscious spending habits compared to six months ago, such as charging monthly subscriptions to credit cards (64%) or using their credit card to make payments (59% ) Another example of quiet spending is the free shipping trick where you buy an item at checkout you didn’t intend to just so you don’t have to pay for shipping, 53% of Canadians are unconsciously spending more and doing this on credit cards and subscriptions. Younger Canadians are spending more unconsciously but are more worried about their financial future. The question is are they doing anything about it?  

Many of us don’t realize the number of subscriptions we have signed up for. Some popular examples are Netflix, Spotify, amazon prime, and even food delivery apps now have subscription options. Think about it, when last time you took a closer look at your statement, you would be shocked at how many of these subscriptions you have and what they are costing you. Jackie shared some tips on how to take charge of your spending to combat some of these quiet spending habits.  

Tip 1 – Be intentional about where your money is going.  

This tip might sound basic but coming out of lockdown, lots of things are changing and many of the things we needed to survive the pandemic are no longer necessary. Now is the time to be mindful of your holiday spending by creating a holiday budget! For this holiday season remember the holiday budget includes more than gifts! Consider what you will spend on gifts, dining out, having guests over and any other holiday-related activities you will be doing.   

Tip 2 – Simplify and streamline. 

You will want to consolidate all your bank accounts in one place, so it is easy for you to look at where your money goes daily. Consider going with the bank where you do most of your banking with.  Also, consider getting a no-fee bank account as well. Bank fees can add up, especially depending on the bank and the number of transactions you do. 

Tip 3 – Plan to spend less!  

After reviewing the past three months of bank and credit card statements notice the trend. Is your current spending plan sustainable? You want to ensure that you are not living above your means and piling up the difference between income and expenses on your credit card.  Create a plan that allows you to have some fun while living within your means and paying down any debt you have. 

Think about budgeting in 3 different buckets: fixed, fun & future. This is a way to manage your cash flow, the fixed part of the budget should be the expenses that are recurring and necessary such as mortgage and rent, the fun bucket would consist of some fun activities or shopping that you would need to spend on, lastly, the future bucket consists of savings you are set aside for emergencies, retirement or major expense in the future such as a home purchase. What can you realistically spend in these categories based on your income? Make decisions about the things you truly value. 

Tip 4 – Pay as little interest as possible:  

For credit card spending, you want to be careful not to spend on things you can’t afford that lead you to carry a balance over to the next month. The PC financial app really helps with budgeting and consolidation of your finances all in one place and they also don’t charge any fees. Shop around on Rate hub for the lowest interest rates you can get around on credit cards and bank rates. Do the same for your mortgages too.  

 Tip  5 – Get Rewarded with cashback to stretch your dollar further! 

Get paid for spending money with reward cards.  The easiest way to do this is to work with financial institutions that offer rewards when you use their financial products. Most financial institutions only allow you to do this with credit cards which can make it harder for some of us to stick to our spending plans. PC Financial allows you to do this with their PC money account- an account you can use like cash, and it is attached to a financial app, where you can create a budget and track your spending all with one click! The best part is you can you the PC to collect points so you can stretch your dollar further! The money account can be used at all of the places you like to shop. Just in time for the holidays! So create that spending plan now… 

 Take charge of your money today and let us help you build your financial fortress in these uncertain times. We are happy to have a 30-minute conversation where we delve into a customized retirement plan for you. We are happy to have a 30-minute conversation where we delve into a customized retirement plan for you. Please reach out to [email protected]