The average Canadian spends 35%–50% of their monthly income on housing and utilities alone. That leaves as little as 50% of their budget for transportation, food, bills, and unnecessary expenditures.
If you want to save money, cutting back on unnecessary expenditures can help. We want to help you do just that with this guide. Keep reading to learn the top non-essential items to consider eliminating from your annual budget.
Alcohol and Tobacco Products
The average Canadian spends about 2% of their annual budget on tobacco and alcohol products. Since recreational cannabis became legal, Canada also started including purchases in this category.
Cutting back on tobacco and alcohol spending will not only save you about CAD 1,800 per month. You may also see indirect savings in terms of health insurance and healthcare costs.
Why? Tobacco use, in particular, can drive up health insurance premiums. Meanwhile, alcohol and tobacco use can increase the risk of chronic conditions like cancer and cardiovascular disease.
Personal Care Products
Some personal care products and services are necessities. This includes shampoo, conditioner, deodorant, facewash, lotion, moisturizer, and sunscreen. In addition, women can add cosmetics and feminine hygiene products to that list.
Yet, with 1.5% of the average Canadian household’s budget going to these products, there is definitely room to cut back. Focus on high-ticket items that you may not use every day.
Perfumes and colognes, luxury cosmetics, nail products, and makeup wipes may not be as necessary to your daily routine as you think. Plus, cutting out these monthly expenses could save you thousands of dollars or more.
The average Canadian household spends at least CAD 186 per year on lottery tickets. That may not sound like a lot. But this is only an average, which may confuscate outlier households with significantly greater lottery ticket spending.
In all, Canadian spending on lottery tickets numbers nearly CAD 10 billion. That’s a lot of money to spend when the odds of winning the lottery are incredibly low these days.
In fact, the odds of getting struck by lightning (1 in 1 million) are better than your chances of winning the lotto. You have a 1 in 14 million chance of winning Lotto 6/49 and only a 1 in 33 million chance of winning the Lotto Max jackpot.
Transportation is a necessary part of living in Canada. It takes up about 13.5% of the average Canadian household budget. And private transportation makes up the majority of that spending.
Switching to public transportation options when available can save you thousands every year. Canada offers a wealth of public transport options, including the bus, light rail, and SkyTrain.
Plus, public transportation will not just save you money on gas. You will also be doing the environment a favor. Public transportation lowers your carbon footprint significantly.
Clothing and Accessories
The average annual expenditure on clothing and accessories in Canada is CAD 3,344. That is more than 3.5% of the average household’s total annual expenditure.
It’s impossible to cut expenses on clothing and accessories altogether. This is especially true if you have young children. Kids are constantly growing out of their old clothes, and it’s part of being a good parent to accommodate that.
Still, you likely have room to cut back on this category. Stop spending on clothes and accessories unless it is absolutely essential. That way, you can add hundreds, if not thousands, to your budget each year.
Household furnishings are things like furniture, appliances, and equipment. Canadians tend to spend around CAD 2,500 on these items annually. That is more than 2.6% of yearly household expenditures.
Furniture and household appliances and equipment are supposed to last. If you are buying new furnishings each year, you are practically throwing money away.
Instead of buying inexpensive furnishing, invest in items that will last. Of course, you may pay more upfront. But in the long run, you will save more money than if you repeatedly buy cheap furnishings every year.
It’s a common saying that you can save more money by dining out than by buying groceries and cooking at home. And according to Statistique Canada, there may be more truth to this than you might think.
The average Canadian household spends about 10,311 CAD on food each month. About 70% of that budget goes to food purchased from grocery stores. The remaining 30% goes toward restaurant purchases.
Yet, the reason for this discrepancy is likely because more Canadians eat at home than at restaurants. Cutting restaurants completely out of your yearly budget can save you around CAD 3,000 per year.
A recent survey found that 61% of Canadians subscribe to at least one streaming service. What’s more, many North Americans say they pay for up to four different streaming services.
Subscription services make up a large portion of recreational spending. Recreational spending accounts for 5% of the annual household budget in Canada. Subscription services make up the majority of these expenditures.
If you can’t cut out subscription services altogether, consider scaling back. Even eliminating one subscription platform can help you save money on these extra expenses.
Save Money With Fast Loans in Canada
Learning how to save money is easy when you follow this guide. Cutting out or cutting back on these extra expenses can free up hundreds, if not thousands, in your annual budget.
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