New Year's Money Remedy #2: Declutter your Finances (and your life)
We’re feeling all inspired to ditch our stuff and simplify our lives after binging on The Minimalists documentary on Netflix. If you don’t know what we’re talking about or haven’t watched it yet, you know what your plans are tonight. Get on it. Here’s a nice little recap in the meantime.
Basically they’re challenging consumerism, and the concept of being attached to our “stuff.” We can all relate to the feeling that if we buy ____ it’ll make us feel good/happier/better. And, that’s actually a huge factor keeping people in debt. The average Canadian owed $21,348 in consumer debt in 2016—that’s a 2.7% increase over the past year. We’ve been socialized to feel like there are things we “need” to be happy.
But when ‘The Minimalists’ (Joshua Fields Millburn and Ryan Nicodemus) started decluttering and letting go of stuff that didn’t add value to their lives, they started feeling freer and happier.
A super cool quote from the film that resonates with us:
Our Do More, Spend Less concept is all about that same notion: Experiences > Things.
A big part of decluttering should start with your finances. So, while you start making plans to clean out your storage unit, attempt a project 333 with your closet and tackle that junk drawer— consider adding in our tips to simplify your financial clutter:
1. Pay those outstanding expenses
Unpaid parking tickets, late MSP payments, IOU to a friend for ???; many of us have some outstanding expenses we keep forgetting about or bills we’ve stuffed in a drawer somewhere. Go through it all, settle up, and start 2017 a little (or maybe a lot) lighter. If you can, sign up for automated payments on anything recurring to make sure you’re not slackin in the future.
2. Do a subscription inventory
Who hasn’t signed up for a free 3-month trial, only to forget to cancel it? Next thing you know, you’ve been paying for an annual subscription for something you might not even use. Do a subscription declutter. Think about the Minimalist’s mantra when you’re figuring out what to keep: Does this add value to my life? It might seem like $5, $10, $20 a month is trivial but it can add up.
There are apps, like Truebill and Trim, that will help do a subscription inventory, so you don’t have to comb through manually. Check em out.
3. Know where your money’s going
Seems simple right? But if you’re like half of the country and living paycheque to paycheque, it’s pretty likely you don’t know where all your hard-earned cash is going. Try to sit down and go through your finances for the past three months, categorizing your spending (ie. rent/mortgage payments, groceries, dining out, etc.). You might be surprised to see where your money’s going. The first step to making a budget is knowing how you’re spending now. After you’ve done that, you can start making that ideal budget in each of the categories—hopefully with a savings budget for something that will add value to your life (like a down payment or travel fund).
There are some cool apps (what would we do without apps…) like Mint that’ll help you with the categorization. And when you have your budget done, ideally you should have your fixed costs (bill payments, rent/mortgage payments, savings) automatically coming out of your bank account, with the rest in a ‘Spending Account,’ like our MogoCard (now in beta). That way, you won’t blow the budget.
New Year's Money Remedy #3: Get your utilization ratio in check
**The MogoCard is currently only available for order through the iOS MogoApp to MogoAccount holders that have passed identity verification. The Mogo Spending Account is only available to MogoAccount holders with an activated MogoCard. Visa® is a registered trademark of Visa Int. Service Association and used under license. Mogo Platinum Prepaid Visa® Cards are owned and issued by Home Trust Company, a TM licensee of Visa Int. and subject to Terms and Conditions. Your MogoCard balance is not insured by the Canada Deposit Insurance Corporation.