Smooth Sailing: Budgeting For Economy Highs and Lows

The Tax Blog for Smart Canadians

Tips and tricks for Canadian tax filers at every stage of life from UFile's tax expert Gerry Vittoratos

Smooth Sailing: Budgeting For Economy Highs and Lows

by Gerry Vittoratos | Feb 14, 2017   Comments:

UFile Blog Changing Economy

Between energy sector lows, tightened mortgage rules, and the potential for new border taxes, sometimes it feels like Canadians just can’t catch a break. Alberta in particular was hit hard by low oil prices, seeing an unemployment spike of 4.8% in 2016 – the highest job loss rate since the recession in the 1980s. The Maritimes saw unemployment standing at 19.1% in Newfoundland and Labrador, while Ontario lost more than 36,000 jobs in July. With the Canadian economy set to grow 2% in 2017, the lows will not last forever.  

Learning to navigate rough economic waters no matter where you are in Canada is essential in order to sail on toward the better and brighter days.

Pay Attention, Not Money

Keeping track of your finances is key, but it doesn’t have to be complicated. Reducing your spending habits during an economic low is essential, where saving money should become a priority. This may mean spending less than you can afford, but will help offset economic uncertainty. Slowly train your mind to think critically about what you’re spending and why.

Think Big Picture

Collecting the previous year’s receipts and expenses early is a smart move for more reasons than one. First and foremost, it allows you to gain some big-picture perspective on your spending habits so you can reassess your budget and lifestyle for the upcoming year.

Collect Ahead

Collecting information ahead of time will save you time and stress when it comes to filing your 2016 tax return before May. This is important during a turbulent economic time, as many Canadians are dealing with stressors like unemployment, high food costs, and higher interest rates.

Drive Less

If you find yourself with a folder full of parking receipts, it might be time to consider the economic and tax advantages of alternative transportation. Cars, while convenient and often necessary, are costly. Try cheaper forms of transportation, like cycling during the spring and summer months or taking public transit – an alternative that could give you up to $75 in tax credits every year.

Cook At Home

The average Canadian family spent $8,109 on food in 2014, according to Statistics Canada. They spent $2,229 of that total eating out at restaurants, which breaks down to approximately $186 per month. Reduce this number to even $100 per month, and you could save $1,032 in one year.

Be A Goal Digger

Saving isn’t easy, but it becomes manageable when you have clear goals from the start. Aim to live within 80 per cent of your income, saving 20 per cent to pay down debt or put aside for times of need.

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