130 – New Year Money Saving & Budget Tips For 2024

Wayne Kay 00:00
It’s 2024. Let’s look into the crystal ball. And near the end of 2024, we want your financial situation to be better than it is right now. 

Welcome to the Debt Matters podcast, where we help Canadians find solutions to their debt with Licensed Insolvency Trustees from across Canada. 

I’m Wayne Kay. Coming up in today’s show, we’re going to talk about the new year, money saving and budget tips for 2024. What is the first thing you need to do to have a better 2024 financially? We’re going to talk about reviewing your finances.

We’re going to talk about creating a budget or a spending plan, and we’re going to figure out how to make sure that you actually stick to that budget. 

My guest today is Daniel Maksymchak with LCTaylor Licensed Insolvency Trustee in Winnipeg. Thanks for being on the show, Daniel.

Daniel Maksymchak 00:58
Thanks for having me back, Wayne. How are you?

Wayne Kay 00:59
I’m doing great. How are you doing?

Daniel Maksymchak 01:02
I’m great as well.

Wayne Kay 01:03
Good. I’m always excited looking into 2024. I’m glad we’re going to be talking about saving money and budgeting and having a better end to 2024 than we’re having right now. Do you get excited about this time of year?

Daniel Maksymchak 01:19
Yes, for sure. It’s that whole fresh start kind of philosophy.

Wayne Kay 01:22
Which is what?

Daniel Maksymchak 01:22
As insolvency trustees, we’re really all about giving people a fresh start and moving forward with a more positive life going forward. But that’s kind of the whole theme of the new years and resolutions and a chance to start over, build upon your strengths and have a better year ahead.

Wayne Kay 01:38
So do you use this time of year as a checklist to say, okay, I’m on track, or do you use this year to build new goals? What do you do? Personally?

Daniel Maksymchak 01:50
It’s a bit of both. If you’re on track, then that’s great. You can continue with more of the same. Hopefully, if you’re not on track, then that’s something where you have to look at setting new goals and new changes that you can make so that you’re financially stronger next year.

Wayne Kay 02:05
So as a whole, how are we doing as a population, do you think we look at it this time of year and say, okay, how can I be better by the end of 2024?

Daniel Maksymchak 02:16
Yes, I think that that’s a natural thing to do at this time of year. Just the same as any resolutions that people have. It’s all about putting themselves in a better spot this time next year than they are at the present and financially, it’s no different. 

So any changes that you can make, whether that’s under the excuse of a New Year’s resolution or just changes generally that are going to improve your financial strength, we’re certainly all for that.

Wayne Kay 02:39
So what do you think is the first step to preparing for a better 2024 financially?

Daniel Maksymchak 02:45
Well, this time of year, when you’re kind of rolling over from one year to the next, you’re going to want to take the opportunity to review the year that passed. So you have 2023. It’s wrapping up now.

That’s a decent sample size, right? It’s twelve full months. It’s the full year. The seasonality of your spending will have been eliminated because it’s all four seasons. Go back to that year and take a look at where you spent it. Where your money went that year. Because without knowing where your money went, you can’t make changes to reallocate it more efficiently next year.

Take the time to go through your year, have a sense of the different categories that you’ve been spending on, and really take a look at that. And say, are there places where my money has been going? Is that where I want it to be going? Is that the best use of my money that’s bringing me the most personal happiness and enjoyment?

Wayne Kay 03:38
Right.

Daniel Maksymchak 03:38
You might be surprised by the amount of money, for example, you’ve spent on morning coffees, getting them out maybe, or lunches at your workplace or something like that. It can really add up over time, especially over the course of a year. 

It might seem like little things, day to day or week to week, but in a year it can be a large number, and that might not be something that you value enough to continue spending that amount on over the full 2024 calendar year.

Wayne Kay 04:07
But you have to review. That’s the important thing. You have to go back. So there is some homework involved here. We have to go through our bank records, I guess.

Daniel Maksymchak 04:17
Yes, it’s a bit of an investment of your time. But it can certainly pay off because, as you say, the first step is knowing where your money has gone. If you don’t know where your money is going, how can you make any changes to allocate that money more efficiently?

So you’ll want to go through bank statements, credit card payments, whatever your primary means is of spending. Review those and try to categorize them.

A lot of bills will kind of have them pre categorized by categories such as food and grocery, entertainment, gasoline, those kinds of categories. And some, even some bank apps will generate a bit of a report like that with pie charts or some kind of graphic display as to where your money is going. 

That would eliminate some of the homework aspect of it if you have access to that kind of information. But over the course of a year, it doesn’t have to be dollar for dollar, but you might like to do it percentage of your spending, or roughly monthly or yearly total as to where you’ve spent your money so that you can get a sense of where it’s going and make changes that you think is going to benefit your life in a positive way.

Wayne Kay 05:26
And if somebody makes the excuse and says, well, I’m not good at that. I’m going to say, okay, I think you are good at that because there’s a lot of people who know exactly how much data they’re using on their phones, right? They pay attention to it every single month. So if they can do that, they can easily look at the bank accounts as well.

Daniel Maksymchak 05:45
Yes. It’s all at our fingertips. It’s just taking the time and going and realizing that the benefit of that is worth doing. Sometimes people are better at doing it as it goes.

Wayne Kay 05:57
Right.

Daniel Maksymchak 05:58
So if you’re not someone, you say, oh, well, I have to go and look through all twelve months of spending at once, and that’s a big headache, then you could at least make a positive change – start doing it monthly going forward.

At least then it’s broken up into smaller pieces to review it or even as you go, as you spend the money, as you go, write it down. Or keep it in a little spreadsheet on your phone or a computer or something like that. So that at the end of the year, you know where your money’s gone. And then this time next year, when you’re budgeting for the next year, you can make the changes that you feel necessary.

Wayne Kay 06:30
So we’ve reviewed everything. We kind of know where we are now. What do we do when we look into 2024?

Daniel Maksymchak 06:38
That’s where you send your budget, right. So once you’ve reviewed it and you know, okay, well, this is where I spent the money. Next year, some of that’s going to be unavoidable and some of that’s going to be money that you may have wished you had spent elsewhere. 

So now is your chance to go forward and say, okay, well, next year I’m going to do things a bit differently. I’m still going to have the same necessities, presumably, but on some of those more discretionary expenditures. What can I change there? Either spend the money in a way that I’m happier with or perhaps spend less overall and put some money aside for something that is a more long term future goal.

Wayne Kay 07:16
Right.

Daniel Maksymchak 07:17
Be it either it’s repaying debt or maybe saving for a trip that you might do only every few years, something larger like that. But it’s about figuring out where your priorities are in life and making sure that your spending reflects that. So when you set your budget for next year based on your spending in 2023, this is your chance to not just do it the same as last year, but to do it how you want to do it going forward.

Wayne Kay 07:43
There’s some power in writing this down as well, isn’t there?

Daniel Maksymchak 07:47
There is. Knowledge is power, so to speak. If you know about this, you write it down, you can then go and say, okay, well, this is how much I bring home in a month, or my household brings home in a month. This is how much I have to spend on essentials because that’s roughly what I spent last year and there’s no way around those. And now this is the money that’s left.

This year I want to spend it on these things as opposed to how I spent it last year. Having that all written down, be it digitally or on paper, is going to give you something that you can keep checking back to and making sure that you’re on track, instead of it just being something that’s in your head and less tangible that is going to, I think, kind of psychologically keep you to your goals more steadfastly.

Wayne Kay 08:35
Yes, you have to look at it. You have to be checking it.

And we see this time and time again, even for celebrities who are living like us, and all of a sudden they hit superstardom and they will always say, well, I had my goals written down. I was looking at them all the time. I was paying attention to them. 

And that’s the same with financial spending or having a better relationship. So the stuff you’re talking about today is pretty much, this should be standard for your life.

It’s a new habit, though. If you haven’t done this before, you have to do it. And it will make a difference by the end of next year. Can almost guarantee it.

Daniel Maksymchak 09:11
Yes, I think so, too. Right? As you said, it’s a habit. It would be a positive habit to get into these things. So it takes time to build positive habits, as we know, in any facet of life.

But it’s something that can really pay off going forward. And I would say it is worth that investment of time. And it’s really depending on what you use in terms of the methods that you bank with or the different data at your fingertips already, it might not even be that much of an investment, and it can have a huge benefit going forward.

Wayne Kay 09:44
So you’ve got the budget set for 2024, which is amazing. If you could do that, you’re ahead of so many Canadians. Absolutely right. So that’s one simple thing. Write that, and then what do you do? Just wait until the end of the year to see how the budget went?

Daniel Maksymchak 09:59
No, you’ll want to check in on it from time to time. Monthly is a good time. So once you have that annual budget, it might be a good idea, because, I mean, a year is a long time, obviously, and it’s tempting to say, okay, well, if I overspent in January, that’s okay, I’ll just make it up in April or something like that.

It’s a bit too maybe wishy-washy to keep you to it as much as you’d like. So once you get it to an annual budget, let’s say for 2024, I would suggest then breaking that up into months and trying to guess it. Okay. The seasonality of things.

If your annual budget for your heating bill is going to be a certain amount of money, obviously you’re presumably going to spend more on that in the winter months. So when you’re doing your monthly budget for the winter months, you would allocate that there, and then you can review that monthly over time, you can check and say, okay, did I spend in that month roughly what I thought I was going to be? 

Are there any changes that I would like to make before I go into the next month? Because if you leave it to the end of the year and we’re having the same conversation again next year, it’s really too late. The money’s gone at that point, and you’ve burned a year without making the positive changes that could really have helped you out.

Wayne Kay 11:11
I just love this time of year. I’m so happy that you’re doing this show with me and we’re talking about this. Because by hearing other people talking about it, it reinforces the importance for me and then helps me keep on track as well. I do write it out.

2023 was a year for me, really, to understand investing. And so I did a lot of research in the investing world, and it’s quite surprising because I didn’t really know too much about it before. But now when I look back at it, I go, wow, I’m so happy I wrote that goal and I’m keeping track of all the information. 

Maybe it’s fitness. Beginning of the year, I’ll write out my plan for every month and every day I’ll have a calendar that I build and that’s what I do. On the 1st of January, it takes me probably an hour, but it puts me in the mindset that I need to be focused on what’s coming up.

Daniel Maksymchak 12:10
Yes, exactly. And your finances should be no different. Those are great examples of things that you can get a lot out of over the course of the year with a small investment of time earlier in the year to plan things out. 

And your finances should be no different. It’s definitely worth that time you put in upfront because you get the benefits of that from the whole year.

Wayne Kay 12:29
Are there any other suggestions? You have to be financially stronger in 2024.

Daniel Maksymchak 12:35
Yes, we’ve talked a lot about budgeting, and that is really at its base, making sure that your expenditures are expected and that they can be managed within your income. Sometimes, though, that’s just not possible.

These days, with rising inflation, increased cost of living, sometimes those expenses for a lot of people are growing faster than their income.

So between those expenses and their debt that they might have had from previous years, maybe before they became stronger at budgeting, or if they had had something come up earlier in life that had been unexpected and had really cost them financially, the math might not just not work.

The income might not be able to meet the current expenditures of the month as well as the debt load that someone is carrying. And the expenditures month to month aren’t really going to change too much. You need to do certain things to survive in today’s society, but there are options to deal with your debt.

So that’s where it would be something worthwhile to take the time to do a free consultation with an LIT to discuss – is there any way we can restructure that debt so that it’s manageable, both with my current income as well as my current expenses, so that I’m not further going into debt each year or each month trying to service both the debt as well as your month to month expenses? 

So if you don’t have a plan to get out of that debt and become debt free in a reasonable amount of time, I would suggest reaching out to an LIT to find out what can be done about that debt so that it’s not a long term burden for you.

Wayne Kay 14:06
Because the one thing I’ve learned from dealing with LITs – is so many of your clients have said, I wish I came to you earlier or sooner.

Daniel Maksymchak 14:17
Absolutely. We hear that all the time.

Because if people, they’re carrying debt but they’re making the minimum payments and they think that that’s fine, but they have no plan to get out of debt in the near to midterm on their own, then really eventually one day they’re probably going to need to restructure that debt anyways. And they’re burning so much money and interest in the meantime trying to get to that point. 

So there’s no harm in talking to an LIT for a free consultation. Find out what your options are. It might not be anything with us. It might be budgeting tips that we can offer or other non legislated forms of debt relief, but there’s no harm in finding out your options. 

And the sooner you do that, usually there’s more options available to you so that you can maybe avoid a Bankruptcy or a Consumer Proposal or something like that.

Wayne Kay 15:10
And with a lot of people going to be renewing their mortgages, they say that there’s going to be a fairly substantial jump for many families. Do you add that into that now, too, as you’re looking ahead and saying, okay, not quite sure what’s going to happen or what do you do in that situation as well?

Daniel Maksymchak 15:28
Yes, that’s definitely something. As we’ve been talking about budgeting, there’s going to be a number of people in this future year who are going to be renewing their mortgage, for example, into an environment of much higher interest rates. So that’s something that they’re going to have to account for as well. 

Try and determine if you’re paying – some people have mortgages at 2% now. They might be renewing at 5% down the road. What’s that going to do to your monthly payment? Is that going to change the payment overall? Is it going to be a difference between the principal split versus the interest? That’s something to talk to your mortgage provider or a mortgage provider that you’re considering going with about. But chances are your overall payment is going to be higher depending on your mortgage.

That’s definitely something that you should factor into your budget and make sure the numbers are still working after that point of time, because you’re going to have no choice. Presumably, if you’re keeping your house, you need to remortgage. The rates are what they are. You’re going to have to find room in your budget elsewhere, and it’s best not to be caught by surprise when that happens.

Wayne Kay 16:27
Terrific. Oh, what a great show. Thank you so much for taking time. Anything else you need to share with us?

Daniel Maksymchak 16:34
No. I mean, it’s kind of what we’ve talked about, which is spend that time up front now –  get that out of the way. Review your 2023 budget. Set up your budget for 2024. Keep on top of monitoring it going forward. Make adjustments as needed, and I think you’ll find that it’s definitely worth the investment of time in doing so.

Wayne Kay 16:53
Terrific, Daniel, thanks so much for being on the show.

Daniel Maksymchak 16:56
Thanks for having me, Wayne. Talk to you again soon.

Wayne Kay 16:58
Well, my guest today, Daniel Maksymchak. You can learn more or schedule a free consultation with LCTaylor Licensed Insolvency Trustee by going to the website lctaylor.com.

And that’s it for today’s Debt Matters podcast. Make sure you subscribe wherever you get your favorite podcast from. And of course, for more information, you can always check out debtmatters.ca. Thanks for listening.