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Plan Ahead: My Best Financial Tip!

November is financial literacy month and in honour of that occasion, Glenn Cooke over at Life Insurance Canada decided to organize a large group of personal finance bloggers to each publish an article on their best financial tip and this is mine.

Lack of planning is one of the biggest and inconspicuous drains on your personal finances there is. Think about it. A little bit of planning goes a really long way in almost every area where money is concerned. If you don’t do at least a bare minimum of planning, I guarantee you are going to overspend 99.99% of the time and most of the time it is 100% avoidable with just a little bit of extra work.

It Pays To Plan Ahead

There are so many way that it pays to plan ahead, but I always find that concrete examples help people understand things better so here are a few thoughts to open your eyes about just how much a difference this can make in your everyday life.

Plan Your Groceries

Adding a dash of planning to your groceries makes for one of the best financial recipes you could hope for! Taking a few moments to glance at the sales flyers for several of the nearby grocers and jotting things down on a grocery list will help focus your shopping trip so that you purchase mostly items that are on sale and that cost a lot less. After doing this for a short while you’ll get to know the regular and sale prices of the items you consume most so you easily spot what is a good deal on a particular food item and what isn’t. This will help you save even more as you hone your skills!

In contrast, if you just walk into the grocery store, you’ll likely just buy whatever looks good at the time and be oblivious to how much you could have saved through buying that product elsewhere for less or by neglecting to buy another product that is just as good for half the price. Even better, if you take a second to be smart and eat a good meal before you go to the grocery store, you’ll also have better self control to choose only those items that are on your shopping list and avoid the expensive indulgences your rumbling stomach tells you to buy that you don’t really need.

Related: Canadian Grocery Coupon Sites

Meal Planning

While you’re browsing the sale flyers like I said above, you can easily plan your meals for the upcoming week or two around the cheaper items you see. This not only has the advantage of reducing your grocery bill, but it also saves you a huge amount of time you will always have the ingredients readily available that you need to cook a healthy delicious meal at home. No more running to the store when you’re missing that key ingredient for that last minute meal you were hoping to make.

Who am I kidding? When you’re missing that key ingredient often times tiredness and laziness take over and your fingers start dialing for takeout or you pack the family into the car and go drop $50 to $100 eating out. Think about how much money that little bit of planning is saving you now!

Eat Out With A Purpose

Speaking of eating out at restaurants, I’m definitely not against doing so because it can be a great way to enjoy some stress free time with family and friends. However, applying a little bit of planning here too can save you a bundle. Instead of choosing a restaurant based on what’s nearby, what commercial you saw on TV recently, or whatever the first person to speak up’s craving is; why not take a moment to think about a good restaurant that gives good value, has a free kids meal, or has a good promotion going on?

You can stretch your dollar even further by taking a quick look for a coupon that could save you as much as 50% off your bill. Keeping an entertainment book on hand for your city is a great way to always have a few good restaurant deals ready for when you need them. You can even get a little more aggressive by cutting down on the appetizers, desserts, and drinks. You still get 90% of the restaurant experience by enjoying your meal with a good glass of ice water and if everyone still has a thirst for more you can easily whip up something later back at the house or buy something on the way home for a fraction of the cost. Paying $6-10 for a drink and $5-$9 for a dessert doesn’t make a whole lot of sense when there is so little work involved in preparing these things in your own home.

I agree, sometimes you just need to splurge, but being a little strategic about it can leave you with a lot of extra money to spend on other things you will find more enjoyable than that little extra at the restaurant.

Related: Get Cheap Movie Tickets

Shop With A Plan

We all needs clothes, furnishings for our homes, the odd gift to give others, and a few cool gadgets and toys to keep us occupied but making those impulse purchases without a plan can mean death to your finances. First, take a minute to put some spending limits on what you are going to buy so it’s easier to walk away when things get expensive. Then, take a minute to check prices online or browse the flyers for the product you are thinking of buying. You might be able to get it for a fraction of the cost without even leaving the house. Now that you know what the apple of your eye is worth, you can easily head to the store where it’s the cheapest.

Better yet, don’t buy it right away and watch the flyers and deal sites for a killer sale or clearance on what you’re looking for and you’ll probably do even better than the prices you found with your initial research. While you’re doing that, you can also accumulate a list of other things you need to buy and make your shopping trip more efficient by getting several items all at once. The time and gas you don’t spend will just add more to the savings!

Related: Shop Across The Border And Save

Don’t Buy Crap

For goodness sake, do a little research on what you’re going to buy before you buy it. There are tons of review sites out there these days and Amazon has an enormous collection of user reviews on almost every product imaginable. Don’t buy anything without glancing at the reviews first. You must know how frustrating it can be to buy something that is supposed to make your life better only to spend endless hours trying to make it work how you thought it was supposed to work when you bought it. Newsflash: not everything works as well as advertised so you need to make sure you’re not the sucker left holding the bag!

Avoiding lemons will save you both time and money. You won’t have to return it the store a few days after you bought it when you realize you bought the wrong thing. You won’t have to pay to repair or replace it when it breaks after a few months. Warranty got you covered? Even with free warranty replacement, you’re still usually on the hook for insanely expensive shipping and packaging costs to send it back to the manufacturer as well your time to coordinate all that garbage. It gets better too! Half the time they’ll send it back to you with the exact same problem you sent it away to get fixed. What then? True story, it’s happened to me many times!

Plan Your Finances

I could go on like this all night, but I’ll end it with this. A little planning when applied to your big financial decisions will save you a lot in costly errors, fees, and unexpected expenses. Compare mortgage rates online before getting your first mortgage and you can save thousands. Research your banking options and avoid some of the most expensive banking fees known to man. Studying up on investment choices and take a minute to understand the hidden fees and how it affects your investment growth could mean the difference between a comfortable retirement and just scraping by. Having access to some emergency cash or better planning your bill payments could save you up 30% in credit card interest charges.

The possibilities are endless, you just need to do a few minutes of planning and the rewards will just keep on coming.

Don’t Plan Too Much

I am a planner by nature and just as it can do wonders for your finances, it can also do the exact opposite and make things worse when you over plan and over analyze everything. You need to find the sweet spot where you get the most return on your time investment. The first little bit of planning and research tends to produce sizeable rewards, and the more time you spend after a certain point will only marginally increase your savings.

Worse, if you spend too much time you can end up with paralysis from over analysis. Too many choices tends to lead to inaction or people actually making worse choices just to get things over with. I do this all the time and it is a major flaw for me so I’ve tried to turn my flaw into something positive by writing how to guides on this site so that average people can benefit from all the time I’ve spent fine tuning things without having to figure it all out themselves.

More Financial Tips

I’ve seen tons of other financial tips by other Canadian bloggers today that you might be interested so here’s a link to a few that I enjoyed:

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My Own Advisor's picture

I love it: "don't buy crap"!

When you fail to plan, you plan to fail.

Good post,
Mark

Steve @ Grocery Alerts's picture

Planning is important, it sounds cliche but if you don't have a plan you can't check how you are doing.

Eliza at Happy Simple Living's picture

You are so right-on about this topic! Planning ahead for meals always makes me happy, because we not only save money - it reduces stress on yours truly. Thanks for writing about an important subject, especially right before the holidays.

Shawn James  's picture

I the November month, all personal finance blogs were packed with same blog post"My Best Financial Tip". I read many blog posts but most of them were discussing same methods. However there are something new. "Don’t Plan Too Much" is little bit awaysome.

Anita's picture

I just started planning my meals. I have saved so much already on groceries by doing this. Before I was buying duplicates, now I don't, so there's a savings right there. I have also decided that unless I have a coupon or there is a really good deal going on, I will not go out to eat. It is so much cheaper to eat in!

Jeremiah's picture

I love the tip to "not buy crap". I like to buy nice things (within reason), but not in a materialistic way. As an example, right after getting married my wife and I bought a cheap couch that quickly fell apart. Now we are looking at spending more money than we did initially for a new couch because our current couch is falling apart. This is one of the life experiences that have led us to believe in buying quality as part of our path to financial freedom.

SavingMentor's picture
That's my favourite part of the post too :) I try to keep crap out of our house with extreme prejudice ... but I still definitely fail at doing so from time to time!
CheekySaver's picture

Planning ahead is critical when your striving to live better on less. July 31, 2013 to Aug 30, 2013 I gave myself a couponing challenge to see how far i could go with coupons and rebates in the month. Here were my totals (yes i did buy some crap too... along with milk, eggs, coffee, sugar, orange juice, oatmeal shampoo, conditioner, body wash, razors,good expensive 3D toothpastes, paper towels, facial tissue, bathroom tissue, deodorants,spice mix, bbq sauce and even facial wipes!) I can't speak for what happens in your house but in my house those are big priority items. (free makeup was a bonus!) Everything purchased was brand name.

Shelf cost $1124.22 and i paid just over $100 with all rebates included.

This challenge gave me a chance to stock up on free items and very cheap items so i won't have to pay full price later. Oh yeah... and at the end of the month i still had $137 left in my grocery fund... i got all that and i spent LESS on my grocery bill!

I will never fully be able to explain the financial freedom that comes from spending money well... as you can see we are certainly not doing without! (Big thumbs up for planning ahead!)

SavingMentor's picture

Very nice work indeed CheekySaver. I'm not as deft at the coupon handling as you are, mainly due to time constraints. I don't often walk away with $1100 in products for $100 except for when it comes to airfare, using credit card rewards somehow, or if you factor in multiple large Shoppers Optimum redemptions which I do all the time.

However, just from coupons/sales alone, I've never even come close to that. I do have a mini-stockpile myself though as I hate paying full price for non-perishable things when you can easily buy them in advance on sale and with coupons for a fraction of the cost.

Yesterday in my trip to Shoppers I got 20x the points on my diabetes supplies which is enough for 3 redemptions at the highest level and then I also picked up a box of tissue (with 200 point bonus coupon), a jug of tide laundry soap ($0.99 after sale + coupon, reg $11), and a 12 pack of Royale toilet paper ($4.99 on sale + 1500 point bonus coupon). All of that should also have 20x points stacked on top as well making the end result extremely cheap.

This weekend is a Super Bonus Redemption weekend at Shoppers Drug Mart so I'll be walking away with $600+ in free stuff from that.

CheekySaver's picture

That is a amazing Shoppers trip! I do have a stockpile but it isn't anything like what you see on a couponing tv show. A one year's supply at as close to free as i can get is the goal.

I hope you have a great time at Shoppers on the weekend!

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