Transform your relationship with money. Find your true wealth.

There’s no gimmick involved – cutting back on a few non-essential expenditures can save you big bucks!

Follow these tips for one year and you could have an extra $2,500 in your pocket!

Brown bag your lunch. Buying lunch five days a week can drain a hole in your pocket. It’s a seemingly inconsequential expense, but when spread out over the course of a year, those quick runs to the food court could cost you thousands.

Buying lunch five days a week at $6.00 a pop will set you back $1,437.50. That’s enough money to take a well-deserved vacation in the Caribbean!

Skip Starbucks. Not every day, mind you. But if you cut your coffee runs in half, you could save yourself $437, assuming your coffee sells for $3.50 a pop.

Use coupons – and use them frequently. You could save up to $520 on the products that you regularly buy.

Use the library. Libraries aren’t just for books. They also give you access to music, films, TV shows, magazines and newspapers – all for free. Cancelling your newspaper subscription in favour of the library will save you $177.12 alone.

And that’s just the tip of the iceberg. There are plenty of things you can cut back on to save yourself money, so get creative. Your pocket book will thank you!

I am a big supporter of the Tax Free Savings Account (TFSA). It’s a great way to save money, guilt free. Unfortunately, people have been slow to adopt this exciting, wealth-building initiative.

In fact, most Canadians don’t even know what a TFSA is. A recent article in the Financial Post suggests that approximately 40% of Canadians don’t know the difference between a TFSA and a RRSP.

In light of this, I’ve put together a brief fact sheet outlining the TFSA and its many benefits.

Here’s what you need to know:

1. The TFSA is a savings account that was introduced by the federal government in 2008. You can contribute up to $5,000 per year into your TFSA, tax-free – unlike an RRSP, which is tax deductible. Withdrawals from a TFSA are not subject to tax.
2. Unused contributions can be brought forward indefinitely, and there’s no limit on how much contribution room you can accumulate. If, for example, you were to contribute $2,000 in 2012, your 2013 limit for would then be $8,000.
3. All Canadian residents aged 18 and older with a Social Insurance Number are eligible to contribute to a TFSA. There is no minimum income requirement to open a TFSA.
4. You can withdraw from your TFSA whenever you need to – and you will not be penalized, although some banks may charge a withdrawal fee.

And that’s the TFSA in a nutshell. I strongly encourage you to open one up, if you haven’t done so already. It’s a quick, easy way to accumulate savings, completely tax free.

Click here to learn more about the TFSA.

It’s never too late (or too early) to revise your financial plan.

Here are some tips to get you started on the right foot in 2012:

1. Become aware of your spending habits. I know I’ve said this before, but I think it bears repeating. Being aware of your spending habits is, in my opinion, one of the most important things you can do to improve your financial outlook.  I recommend saving your receipts and recording them in a journal, on your smart phone or in an Excel spreadsheet. Try this out for a few months, and you will see a marked improvement in your finances – I guarantee it.
2. Separate your needs from your wants. John Stuart Mill once wisely said: “I learnt to seek my happiness in limiting my desires, rather than attempting to satisfy them.” He’s certainly right. There will always be a faster car, a nicer purse, and a larger home – but these things won’t make you happy. A full savings account, on the other hand, will. The next time you feel the need to purchase an expensive object, ask yourself the object represents a need or a want. If it’s a want – set it aside. You’ll thank yourself in the long run.
3. De-clutter. If you have multiple credit cards, debit cards and points cards, you’re asking for trouble. It becomes even harder to track your money if it’s spread out over a series of different accounts. Make every effort to conglomerate your spending (and don’t use your credit card unless you have the funds to pay it off right away)!
4. Set up an automatic savings program (and take advantage of your TFSA!) Back in January, 2011the Financial Post reported that the vast majority of Canadians aren’t taking advantage of their Tax Free Savings Account (TFSA), which allows you to save up to $5,000 a year, tax free. This can add up to huge savings over the course of your life time. Make it a point to maximize your TFSA with a monthly automatic savings plan. You’ll be thankful that you did.

And it’s always a good idea to find out what your money type is. Take my quiz, if you haven’t already.

In my last blog post, I discussed improving your financial outlook for 2012. One of the points I touched upon was separating “wants” from “needs”. I think this thought deserves more analysis, so I’ve decided to expand upon it here.

I’ve spoken about the “Diederot effect” before – a concept that means, essentially, that spending begets more spending. There’s a difference between treating yourself once in a while and spending recklessly, to give the impression of the “high life” (whatever that means). In reality, an expensive car and home isn’t indicative of wealth, but rather, debt.

While we all have different goals and desires, we essentially want the same thing – financial freedom. Spending needlessly will do nothing to further that goal.

As you prepare to get your finances and spending habits in order this year, I’d like to offer you three pieces of advice:

1. Buy based on quality, not brand. This goes for groceries, clothing, and accessories. The big brands don’t always withstand the quality test. When you find something you’d like to purchase, make it a point to see past the product’s fancy packaging and branding.
2. Never pay full price. It can be tempting to rush out and buy clothes as soon as the new season’s collections are released, but I urge you to wait a month or two. You’re likely to get the exact same clothing at a substantial discount. Where clothing is concerned, you never have to pay full price for anything, so long as you’re willing to wait.
3. Stop caring about what other people think. This is a big one – and it deserves more elaboration than I’m going to give it here. Spending is a deeply psychological issue – and it can be closely linked to how we perceive ourselves, and how we want to be perceived. This, however, is all in our heads. Spending money won’t change how the world receives us; you need to be a good, hard-working person in order to do that. Concentrate more on being the good person that you are, and less on using your hard-earned dollars to convey this. You’ll feel better, and your bank account will too.

Christmas trees are up. Stores have begun to offer holiday sales. And fruit cakes and chocolates boxes are on full display at the grocery store.

It’s easy to get carried away over the holiday season, but I urge you not to do it. Holiday debt is a serious, serious thing. This year, Canadians will spend between $500 and $1500 on holiday-related items. That’s a lot of money and, if you’re only making the minimum payment on your credit card, it can take years to pay off.

One of the biggest mistakes people make is starting their holiday shopping before they’ve set up a “game plan.”

Here are 5 tips to help you keep your spending in line during the month of December:

1. Make a list – and stick to it! If you plan to buy grandma a pair of slippers, stick with that. Don’t get sucked into holiday sales that offer discounts if you buy more items. This is just a marketing ploy to get you to empty out your wallet.
2. Pay in cash. Buying presents with money you don’t have will end up costing you handsomely, in the form of interest fees. Only buy items you can pay for upfront.
3. Try to avoid buying presents for yourself. I know this is difficult, but you might save a couple hundred dollars this holiday season if you purchase only for your family and friends.
4. Consider homemade gifts. Baked goods or handmade crafts are always a welcome present. If you don’t have time to cook, consider gifting your friends with one of your famous recipes, placed in a gift basket containing all the ingredients and baking pans required to make it.
5. Send e-cards. Christmas cards are a nice thought, and en e-card is every bit as special (and, in most cases, free). If your heart is set on sending traditional cards, you can buy beautiful ones at the dollar store (you can also find affordable wrapping paper, cards and gift bags there too!And last but not least …
6. Don’t get caught up in Boxing Day hype. If there’s an item you’ve wanted for some time, Boxing Day is a good day to get it. But don’t fall victim to impulse buys. Spur-of-the-moment spending leads to the accumulation of debt. Break the spending cycle this holiday season – stick to your list and you’ll have plenty of money to see you well into the new year.