How to cut back on non-essential spending

Let’s be honest: we all have expenses we really can’t avoid, like housing, groceries and electricity. These are what we call essential expenses.

What we can control, on the other hand, are non-essential expenses. You know, all those “little things” we buy that don’t seem like much at the time. “Many people don’t think these small purchases have much impact on their budget. But non-essentials can add up quickly without us even noticing,” explains Nathalie Jacques, Sun Life financial security advisor.

Here are some ways to reduce your non-essential spending and stay in good financial shape.

Size up the situation

Amélie, one of Nathalie Jacques’ clients, realized she was spending $300 a month at Tim Hortons. Her son’s friend discovered he was spending $150 on mobile apps and games. That’s a lot.

Some expenses add up quickly and we don’t even realize it. Sometimes the charges come straight off our credit card every month.

The first thing to do is take a good, hard look at your spending. But where do you start? Here are some examples of non-essential expenses:

• Music and content streaming platforms (Netflix, Disney+, Spotify, etc.);
• Meal delivery services (Uber Eats, DoorDash, meal kits);
• Restaurants, coffee shops, etc.

Keeping track of each expense will show how much of your money goes to non-essential purchases. Nathalie Jacques suggests you keep all your receipts and add them up at the end of the month. That will give you a pretty good idea where your money’s going.

Review your budget regularly

It’s essential to make a budget, stick to it and review it regularly. Laurence and her partner include all their shared monthly expenses in their budget. Why? So they can save enough to buy a condo in a few years. “I recalculate our budget 2 or 3 times per year. Especially if there’s a big change in how much we’re paying for electricity or insurance,” Laurence explains. “That way, our joint account balance reflects what’s actually happening with our money.”

Make choices

One good way to curb your spending?  Stick to the magical number three. For example, limit yourself to three expenses or subscriptions under $20 every month. After a few months, re-assess what you’re getting out of each one. Another tip: avoid automatic payments as much as possible.  That will help make it easier to keep track of your spending. 

Have a reason for each purchase

Martin Huard is a Sun Life mutual fund representative. In his view, trying to free up more time is a great idea. As long as you use your time wisely! If you’re buying meal kits, you’ll have fewer groceries to buy. But what are you going to do with the extra time you’ve saved? If you watch more TV, you’ll finish all your shows pretty quickly. Then you might be tempted to add another streaming service. The result? You’ll end up spending more on both food AND entertainment. But if you spend that time on an activity instead, that’s worth its weight in gold.