Money Management

Gambling is one activity you might choose to do in your leisure time but, unlike dinner for two or popcorn and a movie, gambling is entertainment with risk. Fun for many, but trouble for others. And almost all of those who get into trouble expect that they will be the big winner. But the truth is, most players lose. That’s why it’s important to decide in advance how much you can afford to spend. Gambling dollars should be money you’ve put aside after essentials like groceries or rent have been paid. If you choose to gamble, having a money management plan that includes such an expense – and sticking to it – will help you to play safer.

• Creating a Spending Plan
• Controlling Your Debt

Creating a Spending Plan

It may not be easy, but creating a money management plan is as simple as 1,2,3.

Laurie Campbell, Executive Director of Credit Canada, says there are just three steps to financial security. Credit Canada is a non-profit organization providing counselling and education services to help individuals take control of their financial lives.

Step One: Figure out where you’re spending your money now. Keep track of expenses by writing down everything you spend for a month. Credit Canada will even give you a monthly budget tracker.

“Often people are quite surprised at how they nickel and dime-away their money in areas they never thought of like the true cost of vehicles and restaurant meals.”

Step Two: Identify and write down your financial goals. What are your goals for one year, five years and your lifetime? 

“It can be anything from a major vacation a year from now to paying off your mortgage,” Laurie Campbell says. “But there’s no point in having a money management plan if you don’t have goals. Without goals, it doesn’t matter how you manage your money.

Step Three: Look at your expenses and see where you can cut back to create a spending plan that will allow you to meet your goals. Start by listing your monthly income and expenses. 

“Whatever is left after expenses can be used towards your goals. But you’ll probably see that you have to cut back in certain discretionary areas. If you didn’t spend $3 a day on a coffee, you could probably save half the cost of that vacation in one year.”

Laurie Campbell points out that entertainment dollars – which would include gambling – are discretionary spending. 

“Before you spend money on entertainment, you need to pay your bills and set aside the money you’ve allocated to reach your goals. The dollars left over can be used for entertainment.” She says the average Credit Canada client spends about $100 a month for entertainment.

“You should plan to spend a fixed dollar amount on each entertainment option. Set your limits. And, of course, you should limit your entertainment spending if you have debts that need to be paid first.” 

Controlling Your Debt:

If you are faced with excessive debt, here are some steps to help get the debt under control:

1. Contact a credit counselling service which can help you make a plan to manage your debt
2. Don’t gamble as a way to solve your financial troubles
3. Put someone else you trust in charge of your bank or credit cards, at least for a period of time
4. Limit the amount of cash you have access to by:
   • Having wages automatically deposited into your bank account
   • Destroying ATM cards or personal cheque-books
   • Setting up bank accounts that require two signatures for withdrawals, rather than just your own
   • Setting up daily cash withdrawal limits
   • Paying bills electronically, not in cash

5 Tips for Money Management

1. Have at least two bank accounts – a personal chequing account and a savings account to meet your financial goals and act as a safety cushion for emergencies.
2. When you first start actively managing your money, record every expenditure to ensure you’re on track.
3. Leave your credit card at home so you’re not tempted to use it.
4. Use a piggy bank to help you save. Even a loonie or two a day can add up over time.
5. Minimize and limit the number of credit cards to one.