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A Budgeting Guide for Canadians

A Budgeting Guide for Canadians

corporateThere are many reasons for Canadians to want to live on a budget. The current economic state, both locally and worldwide, is more than a significant reason. It is shrewd to save money in such uncertain times, regardless of whether you are employed or not. It is somewhat of a bleak situation with the Canadian unemployment rate holding steady at 7.1 percent. Even individuals that are employed may not be taking home considerable salaries. The minimum wage in Canada is between $10.45 and $11.20 an hour. Here are some tips for reducing the spending:

Know Your Worth

You cannot prevent yourself from going over budget if you do not have a budget in mind. The first thing that you need to do is take a long and hard look at your financials. Look at the total income of your household. The main goal of this practice is to determine how much money you have in a single month. The ideal outcome is to have at least a small portion of the income left over. These should be contributed towards your savings.

Make a Plan

Now that you are aware of how much you have at your disposal, it is time to separate the bare essentials from the frivolous items. List all of the things that you absolutely need to spend on each month. This typically consists of rent and utilities. You can certainly reduce how much you spend on utilities, but there is probably a limit, particularly during winter. Groceries are certainly something that you require. There is, however, no set amount that you have to spend each month. Food and other household items are one of the major ways through which you can save more money.

Saving on Food

Buying groceries from discount stores such as Real Canadian Superstore can trim as much as 10 percent off your grocery bill. Walmart stores that also sell groceries are another alternative to big produce stores. This is because Walmart will match the prices of its competitors, allowing you to get the lowest priced food items possible. You can further reduce your grocery bill by buying generic brands rather than the pricier, name brands. Flour, sugar, salt, and other base ingredients have very little discrepancy in quality across the brands.

Buy Household Goods in Bulk

There are certain items such as toilet paper that are considered non-perishable – they have no expiry date. You can reduce how much you spend on these things by buying them in large quantities. Shop at stores such as Costco and Sam’s Club to save even more. Costco’s for instance, provides those with membership to save on items bought in bulk.

Buy Second-hand

Clothing items for children and even adults can be quite costly. To cut your expenditure on clothing, shopping at thrift stores and second-hand stores are good places to start. There are two choices when considering this option – independent consignment stores or chain organizations. The chain stores that you can visit include Goodwill, Value Village, and the Salvation Army. Consignment stores offer an additional benefit – you can trade your old clothes for a decent settlement.

Do It Yourself

Whether it is cooking, fixing, or even creating, one of the easiest ways to save money is to simply do it yourself. Relying on items and ingredients sourced by third parties, may be one of the costlier ways to live. It is best to rely on your own resources when the opportunity presents itself.

There are many different ways for Canadians to budget. You simply have to create a fiscally sound plan and stick to it. Once you get started, you will find more and more ways to save money.

Top Rewards and Cashback Cards in Canada

Top Rewards and Cashback Cards in Canada

Cashback cards have been the most popular form of credit cards in Canada in the past three or four years. And why not?  Cashback cards and rewards programs offer cardholders a certain percentage of the total amount spent on purchases each year as cash. Usually, the amount varies between 0.5% and 2%.

For consumers who use credit cards frequently, this is a highly lucrative offer. Cashback programs are obviously created by nest-eggcredit card companies to lure in new customers. The “cashback” option in these cards may not necessarily mean hard cash returns. The annual rebate may include refunds and other forms of payback with equal monetary value such as air miles or gift cards. In any case, the rewards are highly promising. If you are a Canadian who wants to apply for or switch to a cashback credit card reward program, here are the best offered in the country:

Capital One Aspire Cash Platinum MasterCard

This credit cards offers 1% annual rebate on all purchases minus refunds. The card requires no annual fee, and technically the cashback rewards are unlimited. Cardholders do not need to keep track of purchases or sign up for rewards separately. Everything is automated. The annual interest rate was 16.8% early this year. Price protection, purchase insurance, car rental insurance, fraud protection and  long warranty are included.

Scotiabank Momentum VISA Infinite

Available exclusively to Canadian citizens and permanent residents, cardholders can earn as much as 4% cash back on gas and grocery purchases from eligible stores. Certain purchases from drug stores and pharmacies come with 2% cash back, and everything else eligible has a 1% annual rebate. This was ranked the best cashback credit card three years in a row from 2013 to 2015.

SimplyCash Preferred Card from American Express

Offered by a well-regarded company, SimplyCash offers a 1.5% cashback on purchases made all year. If the net purchases made during the first 6 months reaches or exceeds $400, the cardholder has the chance to get 5% cashback by the end of the year on all purchases. That could amount to a tempting several hundred dollars annually. On the flip side, there’s $79 annual fee, and the interest rate is a steep 19.75%. However, once a cardholder makes more than $100,000 on all purchases, the cashback percentage reduces by a little to 1.25%, but with no cap. Each card is offered with purchase protection, flight delay insurance, rental vehicle insurance, travel accident insurance, and an extended warranty.

MBNA Canada Smart Cash Platinum Plus MasterCard

This popular credit card offers amazing cash returns on everyday purchases: During the first 6 months, Smart Cash offers 5% cash back on gas or any grocery purchases made at stores participating in the program. After the first 6 months, cardholders can still get up to 2% cash back on similar purchases. All other purchases have a 1% cash back guarantee (as the contract allows). To top it all off, there is no annual fee. Those who perform well get the option to easily upgrade to the World Elite version that comes with higher cashback returns.

While the above cashback credit cards seem highly lucrative and desirable, consumers must be aware that there are caveats involved. Understand that you might not necessarily agree to cash returns when you sign the contract. Also, some stores where you spend money at may not qualify for the program. In some instances, the cashback rewards are automatically deducted from interest. If the cardholder misses a payment, nothing will be rewarded for that year.

Importantly, cashback credit cards encourage spending. Do not overspend if you hold one of these cards. Always remember that what you get in return is only a minute fraction of the amount you spend, and also it might not be cash.