CUTTING BACK (NEEDS vs. WANTS)

SESSION # 3

SPENDING TRACKERS

• How did everyone do tracking their spending the last week?

Balancing our Budget

• Last session we determined whether we spend more than we have

• We also learned whether we are saving any money each month or not

Balancing our Budget

• IF you are spending more than you have

OR

• IF you want to save more:

• YOU NEED TO CUT BACK

NEEDS• A need is something essential, meaning you

require it to survive

• Food

• Shelter

• Water

• Heat

• Electricity

WANTS

• A want is something nice to have.

• It may be important to you, but it’s not required to continue living

WANTS vs. NEEDS

• It’s important to learn to set spending priorities

• Decide what is most important so that you will have the money for the things you REALLY need and want

WANTS vs. NEEDS

WANTS NEEDS

Cell phone Shelter

Tim Horton’s Water

Car Food

Cable SOME clothing

Internet

Ipods

computers

cigarettes

alcohol

CHALLENGE• Make a list of things you purchase or pay

for that are WANTS, not needs

CHALLENGE

• Highlight the items on your list that you can cut back on or eliminate all together

CHALLENGE

• Beside each item you have highlighted calculate how much money you can save each month by cutting back

CHALLENGE

• Are you richer than you think???

CHALLENGE

• Keep your calculations about cutting back in a safe place

• In session # 4 we will be setting financial goals based on your findings

CUTTING BACK

• To help yourself spend less, you first need to understand what makes you spend money?

CUTTING BACK

• Ask yourself the following questions:

• What motivates me to buy things? Friends, advertisements, trendy styles?

• Does the urge to buy something die the next day?

• Do my purchases make me happy?

• What “needs” are now collecting dust?

• What can I learn to live without?

CUTTING BACK

• Now that you know what things are contributing to you over spending you can make adjustments

CUTTING BACK

• Avoid trips to stores, shopping malls & online shopping websites

• If you don’t NEED to go to any of these places, don’t go

CUTTING BACK

• Pay cash for purchases and only spend the cash you are carrying

• Don’t use credit cards or debit cards because sometimes they make buying things too easy

CUTTING BACK

• If you choose to have a credit card freeze it in a block of ice and keep it in your freezer so you can’t use it to impulse buy!

CUTTING BACK

• If you think you need or want something, sleep on it and decide the next morning if you still want it

How else can we cut costs?

• Price matching/comparison shopping

• Avoiding name brand products

• Reducing utility usage

• Reducing rent costs

• Participate in free community activities

Comparison Shopping

• Do your research before doing your shopping

• Read the flyers

• Check pricing online or in a variety of stores

• Ask friends and family for advice

• Choose the store with the best price

STORE PRICE

Walmart $79.99

Canadian Tire $89.99

Future Shop $109.99

Price Matching

• A lot of businesses will match the price advertised at another store

• Example:

• Walmart allows you to bring in other stores’ flyers and pay the amount advertised in the flyer

• This will save you the time and transportation costs involved in going to different stores to receive sale prices

Use Coupons

• Check newspapers, flyers, and online for coupons

Use Points Cards

• Some grocery stores offer points cards

• These points cards allow you to receive free groceries once you have earned a certain number of points

Avoiding Name Brands• Stores will usually have a store brand that is

cheaper than the name brand products

• Examples:

• No Frills – No Name or President’s Choice

• Freshco – Compliments or Signal

• Walmart – George or Great Value

• Food Basics – Equality

Reducing Utility Usage

• Turn your heat down & wear an extra sweater

• Turn your air conditioning down or off

• Make sure all electronics and lights are shut off when you aren’t using them

• Hang your clothes outside to dry instead of using a dryer

• Use left over dish or bath water to water your lawn in the summer

Reducing Rent Costs

• Offer to assist with building maintenance in return for reduced rent

• Take on a roommate or live with family

Participate in FREE Community Activities• Use the internet or newspapers to

search for local community activities that are low cost or FREE

• Local Community Festivals

• Canada Day shows/activities

• Parks

• Swimming free days at the local pool

• Free public skating at your locale arena

Any other suggestions?

Milestone # 37

•Use flyers & price lists to compare & calculate

Next Class

• Make sure to continue using your spending tracker notebook

• Setting financial goals

• Saving for wants / the future

• Paying off debt