Ballooning credit card debt? Expensive kids? Large mortgage? Feeling in over your
head? Read below for 5 steps to help you build your financial muscle.

Every day: Record purchases

Keeping track of every dollar spent may seem like a hassle ? every pack of gum?
every trip to the gas station? ? but with the range of high and low tech options,
there?s no excuse not to do it. Jeffrey Schwartz, the Toronto-based executive
director of Credit Counselling Services of Canada, says the exercise is an important
eye-opener that can help you plan your budget. ?You?re going to be able to identify
areas where you can cut back.?

Every pay period: Put 10 per cent of your pay into savings

The key to easy saving is making sure it?s invisible. You?ll be contributing a steady
amount to an account you won?t touch and the money will be taken out before you
even notice it was there in the first place. You can set up a plan with your bank to
siphon off 10 per cent each paycheque ? but feel free to start at a mere 5 or 6 per
cent to ease into things.

The best invisible method for a heavy debit-card user: Take advantage of bank
programs that allow you to round up every retail purchase to the next $5 or $10
benchmark. Say you are charged $22 at a grocery store for toothpaste, shampoo
and deodorant. When you go to pay, the total is rounded up to $25 or $30. The
extra money goes straight to a savings account.

Every month: Tackle one major debt

You could spend the rest of your life making the minimum payments on your
outstanding debts ? and lose thousands on interest along the way. Instead, pick
one to tackle each month, and put whatever extra you can into paying it down.

Every month: Find a new discretionary expense to cut or scale back

You hear about the ?latte factor? ? the way that daily specialty coffee can set
you back $1,000 per year ? but that?s not the only discretionary expense that?s
draining your bank account.

You might consider your bundled telecom-service package a fixed expense, but
there?s a lot of trimming you can do in that department. For instance, get rid of
the unlimited texting plan if you only send 100 messages each month. Unbundle
your services and shop around to different providers.

Every year: Reassess your credit-card and bank-account choices.

You can cut up your credit cards, freeze them, or hide them under the couch, as
dozens of personal-finance books will advise you ? but that?s extreme.

You don?t need to use it often, but a credit card is a near necessity, Murray
Morton, a Toronto financial planner, says. You need it to book a hotel room, rent a
car, etc. Have a credit card for an emergency or to establish credit but pay off your
cards each month and look at the type of cards you have.

Depending on your lifestyle, it?s best to get a credit card with no fee that has an
attainable rewards program. No point in getting a credit card with a hefty annual
fee and a rewards program that is hard for you to obtain.

(Source: Globe & Mail / by Dakshana Bascaramurty)

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