Trying to curb your spending and avoid debt can be a daunting task. It’s with that in mind that author Kelley Keehn suggests Canadians try what is called an “anti-budget.”
Keehn, a personal finance educator and consumer advocate with the Financial Planning Standards Council, joined Global Calgary on Wednesday to explain the concept.
She said an anti-budget is simple, and consists of writing down every single dollar spent in a 30-day period.
“Just once a year for 30 days track all of your spending,” she explained. “Do nothing different. Don’t spend differently.”
Keehn suggests awareness kicks in by the end of Week 1, sparking a behavioural change and helping people cut back on purchases effortlessly.
Five anti-budget tips from Kelley Keehn:
- Tally purchases by category. Once people see how much they’re spending each month per category, they’re shocked.
- Crunch the numbers. This accesses a different, more reasonable part of the brain. Multiply by 12 and be stunned by the annual amount spent.
- Pay only with cash for a week. This also accesses a different part of our brain associated with loss aversion.
- Email or text yourself any time you buy anything. The accountability and awareness will curtail needless spending.
- If you’re going to buy a “want” item over $100 agree to a 24-hour cooling off period.
Numbers released by Statistics Canada last month suggest Canadians owe $1.67 for every dollar of disposable income.
“Canadians do not have adequate emergency savings, they probably never track their spending, and they probably aren’t reaching out for help,” Keehn said.
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