Ahh that Michael Kors Bag my colleague wore today!….Man that GoPro Cam is so cool…! And so on. We all have those branded cravings, and who wouldn’t when we are bombarded by advertising. The problem is that our monthly income doesn’t generally grow as fast as our shopping wish list and consequently, our Credit Card debt.

Looking at your shopping habits and tracking your spending patterns can help you get your dream indulgence, invest your money wisely, and be prepared for emergency expenses.

It is essential to differentiate want from need and impulse from investment, in order to prioritize each expense according to their category; in this series of articles we will address each one so you can make smarter decisions:

Needs: These are the ones you really can’t or should not live without, such as housing, food, health, social interaction, communications, and transportation; and regardless of your financial situation, location, or level of education, you need these ones to live in the 21^st century.

     1)  Housing: This can be your rent or mortgage. It is generally the largest expense you need to cover every month; therefore you need to make this priority number 1. Choose properties with good insulation, gas heating and stove, good ventilation, and with no pools or gym. Yes, these are nice to have, but unfortunately they come with associated costs. Also, when checking apartments in a specific building you like, check for apartments on different floors, you will be surprised in the difference in price between one floor and the other.

If you are paying mortgage, or are planning to buy a property, check the local taxes, chances are that your neighbors across the street are paying less taxes because their block belongs to a different tax bracket.

      2)  Groceries:  You can save a lot of money by cooking at home, even if you are not Chef Ramsey. Vegetables and fruits tend to be less expensive (and healthier) than pre-packed meals and you can compliment your diet with animal or vegetable sources of proteins such as meats, beans, seeds, etc. By having 3 home made meals a day Monday through Friday, you will be able to save hundreds of dollars every month and still be able to indulge 1 or 2 meals at a restaurant over the weekend.

      3)  Cleaning products and Toiletries: Unfortunately these are some of the most expensive items on our list every month; however, you can save big bucks at your nearest dollar store. Some well known brands have signed agreements with the Dollar Store chain (the one with the green letters), to sell high volumes of their products at reduced prices. This is why bar deodorants are found at $1.25 instead of $4, $5, or even $6 at your local pharmacy or supermarket. The same applies to some toothpaste, soap bars, shower gel, garbage bags, toilet cleaning detergent, dishwashing soap, and more.

Another option is going for the store’s private label, such as: No name, President’s Choice, Quo, Life, Personnelle, etc. These are products manufactured by renowned companies who have signed deals with these stores to sell their products as the store’s private label.  

    4) Transportation: If you live in Montreal, there are multiple ways to get around. Walking or biking are always the healthiest and cheapest ways to get around; however, when distances are longer, then you can jump on the STM system. Look at your monthly use of bus and metro to determine whether the monthly pass is worth it. If so, we recommend using the “OPUS á l’anné” program, because you will only pay 11 out of the 12 months of the year, and the longer you stay on the program, the more benefits you will receive. If you are not a frequent user of public transit, then just check the different alternative of STM passes available, a round trip, or a weekend only pass might be a better option for you.

Car share or Car Rental?  Sometimes we need to have our own vehicle for special occasions; and Montreal offers two car share services that are easy and convenient to use: Car2Go and CommunAuto. Although their fees are better than using a cab, these options are only worth it if you are using these cars for a few hours. If you need a car for the day, we suggest renting a car on websites such as Hotwire, where you will be able to rent a car for Friday, Saturday and Sunday for just 40$. Not bad eh?

Ahh, and don’t pay for their gas refill offer, you will save money by refilling what you actually did use by filling up the tank yourself.

      5) Communications:   In this day and age, we can’t avoid telecommunications, but we can certainly make smarter decisions when choosing a plan and a provider. First of all determine what your real needs are: How many people live in the house? Do you really need a land line? Do you really watch TV or are you a Netflix-holic? Are you an internet-phobic or do you panic when there is no WiFi signal? The answers to these questions will help you determine if you really need to pay $100 for that bundle (Landline, Internet, Cable) or if you can just pay $60 just for unlimited internet that will give you access to your favorite TV shows, internet calling options and connection to the world just with one service.

For the extreme savers, you can choose not to have internet at home and use the thousands of connections available at malls, cafés, libraries, and other public spaces.

As per phone plans, there are different options from online telephone services such as Skype or Ring Center to prepaid or pay as you go plans to only call and text plans, to in province only, to Canada wide services with your cell phone provider. You can take a look at them, shop around for offers and negotiate your rates before signing a contract. They will give you promotional prices if you sign up the entire family, or if you bring a friend. All you need to do is ask.

Now that we have covered the most basic needs and identified ways to save; it is important that you sit down with your finances to screen, identify and list all expenses that do not belong to this list. We will address them in our next post to find other ways to make your monthly income last longer. See you on our next post.