Read & reduce

By Gail Vaz-Oxlade on February 4, 2011
Estimated reading time: 2 minutes

When was the last time you actually read your bills? Most people just pay ‘em without giving a second thought to whether they’re getting their money’s worth. Since you work so hard for your money, doesn’t it make sense to see if it’s still going where it will do you the most good?

When was the last time you looked over your home phone and cell phone bills? People shell out thousands of dollars a year on communication without a second thought. A little attention could net you a cheaper plan that gets you what you need and puts money into your savings account. Ditto your electrical bills, your gas bills, your credit card statements, your bank statement. Do you know off the top of your head what you paid in service charges on all your bank accounts last month? No? Time to read your bill! Today, spend one hour going over ALL your bills so you’re completely familiar with where your money is going. That’s right, gather them all up, get yourself a highlighter pen and start familiarizing yourself with where your money’s going. If you find places where you’re surprised at what you’ve been shelling out, it may be time to re-evaluate what you’re getting for what you’re spending. Are you paying to have movies piped in, but never seem to watch? Axe it. Are you buying services at a premium? Move to a lower level of service. Paying for membership at a gym that you haven’t visited in six months? Lose it. Paid even $1 in banking machine fees? Stop it! Look for all the things you pay for, but seldom use, and as you chop, trim, slice and dice, make a list of the money you’re saving. Eliminate just $50 worth of monthly spending, and you’ll have $600 to add to your savings this year. Take that $600, invest it in an RRSP at an average return of 5%, and REINVEST your tax refund every year to make your RRSP contribution grow and in: 20 years you’ll have $29,610  25 years you’ll have $37,485  30 years you’ll have $45,360  35 years you’ll have $53,235  40 years you’ll have $95,424 … all from a measly little $50 a month. Can you imagine what you could do with $100?