It’s critical to look at your financial savings before you spend all of your cash on items you don’t really need. Savings might be towards a wide variety things.
Some examples are:
- Buying a new home or perhaps another larger purchase like a new car
- You retirement savings (RRSP)
- Education
- A vacation
- An emergency fund
Even if it’s difficult to imagine any of those things in the close future for you, it’s essential to think ahead. Look at what you have available once you pay for your fixed costs, and what you may moderately allocate towards your financial savings goals. This can be a weekly withdrawal that is going into your savings account at the bank, or you can have it come out of your account at the last day of the month, have a look at what’s sensible for you and set automatic withdrawals to make sure you don’t avoid or overlook to add dollars into your financial savings.
How much do you have left over at the end?
Now ask yourself what this total might be. What is leftover while you subtract your above constant costs and financial savings with your
incoming cash flow. These dollars are what you allocate to other costs that arise in the course of the month that may be identified as “wants” versus “needs”. You could live without some of these things. Some of those “wants” that may be where all your money goes towards are:
- Subscription streaming channels like Netflix, Prime, Disney Plus etc.
- Entertainment (movies, going out to the bar, alcohol, etc.)
- Restaurants and eating out