Lots of middle-class Canadians make enough money to get by comfortably, but simple daily expenses can sneak up and make you feel broke.
Daily Tim Hortons and Specialty coffee runs
Stopping for a $5 cup of coffee and breakfast snack each day doesn’t seem like a big deal, but it really adds up to more than $150 per month per person. In a year, it’s very easy for a couple to spend $3,000 on drive-through convenience without even noticing.
Spending the extra time to brew coffee at home will free up that money instantly.
Food delivery apps
Ordering dinner using apps like Uber Eats or DoorDash might seem like a good idea on an exhausted weeknight. Fees, delivery costs, and tips add up to double what you spend on food.
That inexpensive $20 takeout order can turn into $40 before it reaches your door. Swapping to pick up your own meals or having convenient frozen meals stocked at home saves you hundreds each month.
Unused subscriptions
Streaming services, gym memberships you never use, and app subscriptions on auto-pay bleed money without you noticing. Since you’re spending $10-$25 here and there on different credit cards and different days, it seems harmless.
Go through your bank statements every few months and cancel unnecessary subscriptions. You’ll immediately free up consistent money.
High Canadian Bank and mutual fund fees
Canada charges some of the highest mutual fund fees in the developed world. These fees can devour 2% or more of your investment returns annually.
Paying $15-$30 monthly in chequing account fees for not maintaining ultra-high minimum balances just rubs salt in the wound. Moving your money to fee-free digital banks and low-cost index ETFs allows far more of it to work for you.
Unplanned “Target-Style” trips to big-box stores
Going to Costco or Superstore for two things always ends up with a $250 bill for bulk snacks and household items. While buying in bulk can save you money, purchasing unnecessary items in bulk will just waste your money and food. Avoid small impulse buys by shopping with a predetermined, written list.
Small credit card balances month-to-month
It seems easy to carry a low balance on your credit card when you pay only the minimum due amount. But with Canadian interest rates hovering above 20%, even small balances can become long-term debt.
Before your next pay cheque even arrives, interest is taking a silent bite out of your earnings. Use your credit cards like debit cards; pay your statement in full.
Upgrading smartphones on 24-month financing contracts
Contract phone plans from major Canadian carriers charge you an additional $30-$60/month for your device. It feels normal to pay upwards of $120/month per line because the price is packaged, but owning your paid-off phone cuts your bill in half. Families save thousands in a few years by switching to BYOD (bring-your-own-device) plans with discount carriers.
Name-brand groceries over house brands
Buying name-brand cereal, canned goods, and cleaning supplies instead of store brands such as No Name, Great Value, or Compliments silently costs you 20% to 30% more at the grocery store.
Ingredients for many pantry staples are exactly the same, but that extra percentage adds up by the end of the month. One of the simplest swaps to lower your food budget is trading brand names for store-brand versions.
Frequent gas station and convenience store pitstops
Gas stations or corner store stops for bottled beverages, energy cans, or junk food are extremely expensive compared to purchasing these items at your normal grocery store.
Spending $4 on one drink or $5 for a bag of chips several times a week can effortlessly leach away $50 or more per month. Bringing snacks and a reusable water bottle instead will allow you to keep that spare change.
“Buy Now, Pay Later” services for small purchases
Breaking up a $120 clothing or electronics bill into four small $30 installments tricks your brain into thinking you basically got it for free.
As various installment purchases get stacked on top of each other from paycheck to paycheck, they stealthily consume your future earnings and lead to surprising cash shortfalls. Be mindful of your little discretionary purchases and think of them as one-time deals.
Over-insuring older vehicles with low deductibles
Maintaining a low deductible on an older vehicle costs Canadians more than they need every month at the pump. Increasing your deductible just $250 to $1,000 could save you thousands on annual premiums and still cover you in case of serious accidents. An annual review of your policy with your broker can keep you from overpaying on coverages you don’t need.
Ignoring home heating efficiency in winter
Unsealed drafty windows, cranking up the thermostat, or otherwise ignoring heat loss will rapidly inflate your heating bills throughout the Canadian winter.
Low-cost solutions such as window insulation film and a programmable thermostat can net you savings of hundreds of dollars when it matters most. Seal up those small drafts around doors and windows to prevent your money from flowing out.
Buying lunch at work
It doesn’t seem like much. Paying $15 to $20 for lunch downtown three days each week is just part of working. But it adds up to over $200 per month per person.
Add stopping for coffee each morning, and daily food costs can exceed $3,000 per year. If you pack leftovers or make simple lunches at home, you’ll have that extra money for worthwhile savings or weekend activities.
Paying out-of-network ATM and transaction fees
Every time you use an out-of-network ATM or go over monthly transaction limits on bottom-of-the-line basic accounts, you’re charged $3-$7 in fees.
That $5 charge doesn’t seem like enough to sweat over when you make that decision, but several times a month adds up to more than $100 per year for absolutely no reason. Use your bank’s branded ATMs or get cash back at grocery stores instead.
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