Canadian Spending Under the Microscope
Last week, MacLeans magazine published a detailed report on the average Canadian, revealing statistics on health, learning, political opinions and spending habits. It turns out that Albertans are the biggest income earners, but also the biggest spenders (makes sense). Despite this concentration in Alberta, we all can learn about our financial habits. According to the analysis, Canadians spend more on restaurants than they do on clothing, fresh vegetables and fish! This provides some perspective on where we are consciously or unconsciously prioritizing our money.
Contrary to our grand-parents’ generation, we are one who pursues instant gratification. We tend to focus on the day at hand, without giving much thought to the future. Well, I suppose we contemplate the future to the extent that it does not change the course of what we are doing today. We are living in a time where an immediate reward trumps a responsible sacrifice, where we want to have fun, where we figure the future will work itself out naturally. While living in the moment certainly lends to a fulfilling life (I am a yogini after all), it can also get you into trouble if you completely disregard the future consequence of decisions made in the present. Remember La Fontaine’s fable The Cricket and the Ant? If you do nothing but sing all summer, what will you survive on come winter?
Given these revealing statistics, perhaps it is time to take our spending into perspective. Here are a few helpful ways to get on track.
- Track your spending: It is difficult to fix a problem if the culprit is unknown. During the course of a few weeks, take note of your spending (Mint will help your track your spending). And I mean every penny. No amount is too small to be counted. It is often these frequent ‘small’ expenses that get us into trouble;
- Re-evaluate your finances: Once you have recorded your spending, take the time to analyze it and determine whether or not it aligns with your main financial goals and priorities;
- Develop a budget: Fiscal responsibility begins with a budget. A budget provides a realistic overview of your finances and allows you to plan your spending accordingly. The more you plan your spending and savings, the less stress it will cause in the future;
- Cook at home: While many argue that eating out is simply more convenient, I would urge you to avoid the convenience of a restaurant and enjoy the convenience of planning. Taking the time to plan your weekly menu can save preparation and cooking time throughout the week, not to mention saving you the small fortune it seems the average Canadian spends eating out. Preparing meals at home will help contribute to a well-balanced diet, not to mention the opportunity for creating quality time in the kitchen as a family;
- Grow your savings: it is important to think about the future – not necessarily live for the future, but at least consider it. With this in mind, aim to save 5% – 10% of your gross earnings for retirement and/or life’s incidentals.
Having said all this, becoming money-savvy requires time. Learning to prioritize and maintain balance will help you succeed in your quest for financial independence.