Decision Making & Spending

There are a number of easy and quick tips that you can apply into your everyday choices to reduce your spending habits. You don't have to make huge changes from the start - try to implement a couple of small changes until they become comfortable and then add a few more!

1. Reduce grocery costs: Shop smart for groceries by purchasing generic brands instead of name brands, shopping during sales, buying fewer pre-packaged foods, and buying only the necessary items.
2. Carry cash: Determine your budget at the beginning of the week or month, and take out the amount of cash you deem available for spending. This helps keep you on track as watching the money deplete can stop you from overspending.
3. Set up automatic savings: Set up an automatic transfer to put money into a savings account. Saving is much easier when you don't even need to think about it and it is never too early to start!
4. Buy used textbooks: You can buy the textbooks you need for your classes from students who have taken those classes in the past. Buying used greatly reduces the cost and you can also try and sell your textbooks once you are done with them!
5. Make a list: Whenever you're going shopping, make a list and stick to it. Don't get sidetracked by promotions or new items, as enticing as it may be!
6. Make coffee at home: Are you guilty of needing a cup of coffee each morning before you can hold a conversation? You're not alone. Try making coffee at home instead of buying it. If you'd normally spend $5 on a cup of coffee each morning during the workweek, making coffee at home could save you $100 each month.
7. Pack a lunch: Bringing a lunch to work or school is another great way to reduce your spending. Be sure to pack your lunch the night before to avoid running out of time in the morning and having to resort to purchasing lunch.
8. Buy in bulk: Try and purchase staple items in bulk, such as laundry detergent, dish soap, garbage bags, etc. This will save you money in the long run.
9. Get creative with your entertainment: Try and brainstorm activities you can do with your friends that cost less money. For example, invite friends over for a potluck instead of going out for dinner, or go for a walk around the neighbourhood instead of going to a movie. Have fun in ways that save you money!
10. Avoid stress spending: The mood that you are in when you go shopping can greatly influence your likelihood to impulse spend. While it may be comforting in the moment to go out and treat yourself to a brand new pair of shoes, you may regret it later when you look at your budget. Try to find ways to de-stress that don't involve spending money, such as baking a cake or getting some exercise.

Have you ever checked your bank account and been surprised at how much money was remaining? Sometimes it may feel like your money is disappearing before your eyes! Certain situations can increase our likelihood to impulse spend, and being aware of these can reduce hidden money drainers. Before you shop, remember your TEMPO:

• Time of day: Try to shop at a time of the day or week when you have an adequate amount of time and feel less stressed. When you are tired and under pressure, you are more likely to make unwise choices, such as buying fast food instead of groceries to cook. Give yourself the time you need to accomplish your task the way you set out to.
• Environment: Certain environments can increase your desire to spend. While it may be fun to "kill time" at the mall, that time can easily become a costly trip.
• Mood: Be cautious of certain moods and emotional states that make you more prone to impulse purchases. I'm sure you have heard that you should never go grocery shopping when you are hungry, as you are more likely to buy additional food that was not on your list. Pay attention to the moods that increase your shopping behaviours and try to limit shopping while in those moods.
• Place: Are there certain stores that you just can't resist purchasing something from? Maybe you regularly browse your favorite shop online to see what is new, and before you know it you have a whole shopping cart full of items you did not need. Once you understand the places that cause you to unnecessarily spend, you can be sure to avoid those spots as regularly as possible.
• Occasion: Identify the occasions that cause you to impulse buy. Do you feel the need to spend more during summer holidays or when you catch up with a certain friend? The best way to manage these costs is by ensuring your budget has wiggle room for seasonal or irregular expenses.

If you can be aware of your TEMPO, you will reduce your impulse purchases and gain better control over your spending habits. To learn more about how to manage your TEMPO, visit myMoneyCoach.

Feeling like no matter how hard you try you just can't save money? Try setting spending priorities using the 1-2-3 system. This method will help you understand your needs versus your wants, allowing you to regain control of your spending.

Collect all your bank statements from the past two months and number each transaction with a 1, 2, or 3.

• Items that are essential for healthy living (e.g. basic food, shelter, and clothing) should be labelled with a 1. These are the items you absolutely can’t live without. 
• Items that are not essential but are important to you (e.g. phone, internet, running shoes) should be labelled with a 2. These items make your life more enjoyable, but aren’t necessities. 
• Items that are not essential and do not significantly improve your life (e.g. candy bars, app downloads, subscriptions) should be labelled with a 3. These items can be costly and are often huge money drainers. 

Now that you have all your transactions labelled, add up all yours 1s, 2s, and 3s to see how much you spend in each category - you might be surprised!

Your goal for the next month is to eliminate all your spending on number 3 items and reduce your spending on number 2 items. After practicing this habit, you should feel less strapped for cash when your bills come due next month. You might even have some leftover cash to start building your savings!

You can make your financial goals a reality, or at least get closer to accomplishing them, by making sure your goals are SMART:

• Specific: Define your goal carefully, including the total cost.
• Measurable: Break down your goal into monthly milestones and a monthly cost. This will help keep you on track. Or you could even set weekly goals. The easier it is to track, the better.
• Achievable: Look at your current budget and see where you can cut other costs so you can afford to put money away for this new goal each month.
• Realistic: If your goal isn't realistic, it's very unlikely you will stick with it. Consider all the aspects of your goal that impact the practicality of it, including time of year and unexpected expenses.
• Timely: Give yourself enough time to reach your goal so you aren't stressed, but don't make it too easy. You may not need as much time as you initially think.

There are undeniably a lot of costs associated with being a student, but there are a number of ways you can minimize your spending:

1. Leave your car at home: If you park on campus you will quickly learn how fast this cost can add up. Taking public transit will also save you money on insurance, gas, registration, and maintenance. Use your UPass!
2. Say no to credit card companies: Oftentimes, credit card companies visit campus at the start of the school year in an attempt to convince students to sign up. The cards they are promoting have very high interest rates, which can quickly eat up your budget if you maintain an outstanding balance.
3. Consider living with roommates: This will not only reduce your cost of rent but you will also be able to split utilities and internet bills.
4. Plan out your meals ahead of time: Cooking at home can save you up to $650 each month (*based on University of Alberta Supplementary Bursary application data). Need meal prep ideas? Check out budgetbytes!
5. Apply for interest-free status on your loans: If you have previously taken out government student loans but don't need them this year, make sure you fill out the correct paperwork to keep your loans interest-free and out of repayment. Contact an advisor if you have questions!