"So, Richard, how do I manage what I don't have?"
Fear not. 2012 could be your year to find the money.
I sometimes ask seminar attendees to listen carefully to my ultimate secret of financial success. I tell them: "Spend less than you earn."
Here are 10 ways to "Find the Money."
1. Reduce your "outsourcing." Think of all the things we hire others for and transform them into a free workout. You will burn calories by doing simple tasks like gardening, washing the car, cleaning windows/gutters.
2. Take up cooking as a hobby. Often for less than the price of appetizers in a restaurant, you can serve family and friends a gourmet meal.
3. Cut telecommunications costs. Subscribe to Skype or other free Internet phone services, look into newer and cheaper IP phones and think about trimming your cellular phone package, especially the costly data plans. Shop the market to make sure your Internet, landline and cellular providers are giving you the best possible deals.
4. The Internet is reshaping the television landscape. Compare the benefits and prices of alternative television service providers.
5. Save money on your insurance costs. Visit your insurance broker to make sure you are taking advantage of all the discounts available to you. Consider consolidating your life insurance policies.
6. Review your mortgage. Interest rates are at an all-time low and you need to have a talk with your bank or mortgage broker to get the best possible rate. In many cases, it can even make sense to pay the exit penalty.
7. Reduce banking and investment expenses, especially those hidden in the legal documents. Doing a proper expense audit could uncover thousands of dollars.
8. Look for forgotten investments like old bank or brokerage accounts, stock certificates, Canada Savings Bonds or old cash value life insurance policies. Perhaps they could be invested more effectively.
9. Buy fewer books and use the library. Your property taxes pay for it whether you use it or not and it's a cozy place to read.
10. My personal favourite is to get up five minutes earlier and make your own coffee.
The compound effect of attacking many different expenses will result in surplus cash flow that you can use to reduce debt and bolster your investment portfolio.
The opinions expressed are those of Richard Vetter, BA, CFP, CLU, ChFC.
Richard is a Senior Financial Advisor and Branch Manager with WealthSmart Financial Group / Manulife Securities Incorporated in Richmond, BC. Manulife Securities Incorporated is a Member of the Canadian Investor Protection Fund.
