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Photo By: Frexcelsior

I’m just getting started on this journey into the black. It’s not easy but I’ve been able to do a few things I think will make for a healthier financial future. Here are five things I’ve done to save money in the past month:

  1. Contribute to a high-interest savings account: I took my tax return and put it into a high-interest savings account. This serves as my emergency savings so instead of relying on credit the next time I scratch the side of my car, I can get it fixed with my own money. Let’s hope I won’t need to use it…
  2. Park the car: Instead of driving, I’ve been walking and biking more often than before. In the past month, I’ve only filled up at the station twice ($86). It’s still a lot of money but I have 3/4 of a tank remaining which will last me well into August.
  3. Cook more: Better for my health and wallet, preparing my own meals instead of buying them has worked pretty well so far. I’ve already told you that I save about $200/month now that I’ve reduced dining out. How much would you save if you reduced dining out by two or three times a week?
  4. Switch grocery stores: This is something I’m still transitioning to. Instead of going to Loblaws where the store is bigger, cleaner and well-stocked, I’ve been going to cheaper alternatives like No Frills and the ethnic-friendly T&T. What’s the point of buying bread at Loblaws if it’s the same price as the convenience store downstairs? I’m looking forward in reducing the weekly grocery bill.
  5. Track money: People seem to find this a lot scarier than creating a budget and I’m not going to lie, it’s pretty horrifying if like me, you’ve been ignorant to your spending. But facing your expenses is possibly the most important thing you can do when trying to get control of your finances. If you know where you’re spending, you’ll know where to cut down. Now I know…and knowing is half the battle.

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Photo By: Mike9Alive

“Interest rate” is one of those terms I think I understand, but I don’t fully ‘get’ how it works. Pete is back today with some great answers to my questions about interest rates. He explains what an interest rate is, where we find them, how they’re determined and why credit cards have different rates.

Very briefly, please explain what an interest rate is.

An interest rate is the rate at which borrowed money has to be repaid. It is typically expressed as a percentage. A rate of 1% implies that if you borrow $100, you have to eventually pay $101 back the person or institution you borrowed the money from.

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Scoobymoo
Photo By: Scoobymoo

Laziness costs money. It cost me at least $12 in the past two months. While I hummed, hawed and thought about changing banks from Royal Bank to President’s Choice Financial, I lost money. A $4 monthly fee and 50 cents for every additional interaction may not seem like much but it adds up. Every month or two, it could be one less meal out, movie or half a tank of gas. That’s how Royal Bank makes its record profits.

Despite this, I kept paying those fees. I suppose I can blame my cynicism for my procrastination. For years, as a Royal Bank customer, I had become so used to paying for banking “services” I just thought it was normal, I expected to pay to use my own money. Despite friends’ raves about PC’s fee-free banking, I was still hesitant. Why would one bank give it away for free while others charge for their services? There must be a catch. But that’s just what PC does: fee-free banking. There is absolutely no cost for putting your money into an account and taking it out. There are unlimited debits, cash withdrawals, money transfers and even cheques are free. So now that I’ve set up my account, I’m wondering: why did I ever pay for something I could get for free?

Lesson learned: Don’t pay for something you could get for free.