The cost of living in Ottawa and across Canada isn’t getting any cheaper. High inflation is hitting families’ budgets, while the housing market is increasingly unaffordable and out of reach. Prices at the grocery store are rising without any signs of slowing down, the housing market has gone out of control, and gas has gone up.
On top of that, many families have had one or more income earners go through periods of pandemic-related unemployment. That means dipping into savings accounts and drawing on emergency funds.
It’s tough for Ottawa families to get ahead, but that doesn’t mean you can’t achieve financial wellness with the right financial strategies. These strategies can help you accomplish more with your money.
#1 Get Help with Debt
The first step to achieving financial wellness is a plan for your debt. If you’re juggling multiple credit card balances, explore your options for reducing interest rates. Consider debt help programs that involve negotiating with creditors to come up with a more favourable payment plan by cutting those interest costs.
You can also reduce how much you pay in interest by targeting your most expensive debts first. Make a budget that maximizes the amount of extra cash you can put toward your debts. Put that money toward bills that come with the highest penalties and interest charges first.
Then, with the money you have leftover, revise your budget to determine how much to spend on monthly expenses.
#2 Create a Weekly Meal Plan
With the cost of groceries only climbing higher, it’s never been more important to control your grocery costs. A weekly meal plan can help you control your costs by reducing waste and making the most of leftovers. Try these tips:
- Check the flyers and plan meals around food that’s on sale, especially more expensive proteins.
- Make use of a lot of inexpensive grains like rice and pasta as a foundation.
- Make a menu that will use up produce and other ingredients before they go bad.
- Use seasonal produce and ingredients that are more affordable and abundant.
- Plan meals that will leave you with lots of leftovers that you can easily pack for lunch, whether for your kids or yourself.
A meal plan can also reduce your daily stress. When you already know what’s for dinner and have all the ingredients at home, that’s one less decision you have to make in a day. Plus, the fewer trips you take to the grocery store, the fewer impulse buys you’ll be tempted to make.
#3 Become a “Wealthy Renter”
It’s no secret that the housing market in Ottawa has gone through a frenzy. Home sales were up 15% year-over-year in 2021, and prices remain historically high, even if offers are beginning to cool down.
For many renters, the housing market is simply out of reach. It can be disappointing to realize that homeownership isn’t in your near future, but it could be a blessing in disguise.
Buying a home requires a sizeable down payment. Even if you qualify with only 5%, you’ll be paying higher monthly mortgage payments. At today’s prices, that can be a significant burden on your finances. On top of that, you also have to pay for every repair yourself.
When you don’t own a home, that money could be going toward retirement savings and building your wealth. Homeownership is a major expense that can stand in the way of your ability to save. Renting longer could be a way to grow your wealth. That can also put you in a better place to buy should prices fall in the future.
#4 Rent Out Your Basement
If you’re already a homeowner, you might be feeling the pinch of mortgage payments and home repairs. As much as it’s a relief to get on the property ladder, many wind up house poor, where a large amount of your income goes to paying for your home, leaving little room in your budget.
You can offset the costs of homeownership by converting part of your home into a separate apartment and renting it out. This is one of those cases where going into debt could be a good idea. A line of credit can help you pay for the renovations. Debt that builds your income is a bit different from a credit card.
#5 Teach Your Kids About Money
When children want something, they’re not shy about it. Whether it’s a detour down the toy aisle or the sugary cereal at the grocery store, kids of a certain age can be very vocal with their requests. An essential part of growing up is teaching them why they can’t always get what they want, and it’s not just because of the sugar content.
When you teach your kids about money at a young age, it has two effects. First, you can put less pressure on yourself to fulfill their every want without feeling like the bad guy. Second, you teach them a valuable financial lesson that they’ll carry with them for the rest of their lives.
Help your kids learn the value of money early on. If they want something that you’re planning on getting them anyway, teach them to earn it. Otherwise, they might wind up thinking that adults can get everything they want on a whim, too.
Financial wellness is within your reach. If you can trim your expenses or find new ways of generating income, you can beat debt and start building wealth. Along the way, you can ensure that your whole family learns a valuable lesson in money management.