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Two strategies for efficient debt repayment

Debt repayment can feel like an unending, especially unique form of torture. You make your minimum payments every month, and yet the number you owe seems to shrink so, so slowly. Will it ever be paid off?

There are two common strategies that some experts say can help you pay down your debt faster. They’re called the snowball and avalanche strategies, and while they sound real cutesy, there’s some real tactical cleverness behind them.

Wanna learn what they are? We’ll tell ya!

Debt snowball and debt avalanche applications

The first thing to know is that these two strategies only work for folks with multiple debts. Maybe it’s a car loan and a credit card, or a handful of credit cards, or a line of credit and a personal loan. They both offer a strategy for tackling numerous debts more efficiently.

Both methods also require you to make payments in varying amounts. For this reason, they don’t work on debts like mortgages, which typically require a fixed payment on a fixed schedule.

Minimum payments suck

The second thing to know is that minimum payments are designed to keep you in debt longer.

What? Really? But don’t lenders want me to pay them back?

Yes, they do—but they want you to pay them back slowly, over a long period. This allows them to assess more interest charges and collect more from you over time. This is why debt can cost you more the longer you hold it.

So if you’re making only minimum payments on your debt, the first thing to do is consider if you could afford to accelerate your payment schedule. Even if you can only afford to up those payments by a few dollars, it could really help.

The interesting thing is both the snowball method and the avalanche method rely on minimum payments to work. In this scenario, the payments work more like maintenance fees while you work through your debt in stages. This is basically the only time making minimum payments on your debt might be reasonable.

What’s the debt snowball method?

The snowball method tackles the mental game of debt repayment.

In this strategy, you make your minimum payments on all of your debt except the smallest debt you hold. On this debt, you chuck any extra cash you have onto those payments.

If you hold three debts, one $1,000 debt, one  $700 debt, and one $100 debt, you’d make the minimum payments on the first two, but would make accelerated payments on the $100 debt.

The idea is that this can help enable you to pay off the smaller debts faster, which feels like a huge win. When you pay off your $100 debt, you start paying off your $700 debt at an accelerated rate. Lastly, you tackle your $1,000 debt in the same manner.

The “snowball” name comes from the momentum you build as you tick each debt off your list. According to a recent study from the Harvard Business Review, this repayment method is the best of the bunch, noting “focusing on paying down the account with the smallest balance tends to have the most powerful effect on people’s sense of progress – and therefore their motivation to continue paying down their debts.”

If you struggle with the mental commitment required to pay off your debt, this could be a great strategy for you.

The biggest criticism of this method is that by focusing on the debt with the smallest value, you may be letting other higher interest debts drag on, costing you more over time. You should review your interest rates to determine if this concern is relevant to you.

The avalanche method

Then there’s the snowball method’s big bro: the avalanche method.

Instead of tackling your smallest debt first, the avalanche method looks at the debt with the highest interest rate. This could be your smallest debt, your biggest debt, or the one smack in the middle; high interest rates can be what traps us in a debt cycle, so focusing on eliminating the debt with the highest interest rate is meant to reduce the cost of your debt over time.

Say we have the same debts: $1,000, $700, and $100. The first and third have the same interest rate, say 12%. But the $700 debt has a 24.99% interest rate.

A minimum payment on a $700 debt could be around $20 depending on your credit score. If you only made the minimum payment on that debt, it would take approximately 16 years and 4 months to pay it off, and you’d pay $1,098 in interest.

Yeah. You’d pay more in interest than the principal balance owing, and by the end, your debt would be old enough to hold a learner’s driver’s license in most parts of Canada.

By redirecting any extra funds to tackle that high interest debt first, you’re intending to shorten your repayment period and save money over time. If you have debt that has a high interest rate, the avalanche method could be perfect for you.

The challenge is that it takes real commitment and discipline to stay consistent in your debt payments, which is critical to the success of this strategy.

Which debt repayment strategy might be right for me?

Your circumstances are totally unique, so only you know which may be the best debt repayment strategy for you. But you can embrace a few helpful ideas that might make your journey to debt freedom a bit easier.

First, don’t take a loan from a company you don’t trust or with terms you don’t understand. Our friends at Mogo offer personal loans, for example—but their entire goal is to help borrowers pay their debt off ASAP. Check out their site to get a quick pre-approval that doesn’t impact your credit score and a transparent loan experience that will help you get debt-free faster, so you can get back to saving.1

You could also consider debt consolidation. By obtaining a loan at a lower interest rate and using that loan to repay your other higher interest debts, you could save money in interest charges over time. You can read more about that here.

You might also hold the type of debt that doesn’t—strictly speaking—need to be paid down right away, like a student loan or a mortgage. Read more about that here.

Ultimately, the best debt repayment strategy is one you can stick to. Make more than your minimum payments if you can, pick a plan, and stick to it. You can be debt free—just keep at it.

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5 ways to spend less online

Over the past few years, online shopping has become increasingly more common. It soared when the pandemic hit, leaving most of us in lockdown with no choice but to shop online.

This massive boost in online shopping has been burning holes in our wallets. For better or for worse, the internet and social media are major sources of temptation. Clicking a link to buy something takes almost no effort, and adding just a few dollars more to get free shipping is even more enticing. So, it’s easy to overspend and lose control of our finances.

We’re here to provide you with a few helpful tips on how to spend less online without totally missing out on all the fun.

Unsubscribe from newsletters and promotional emails

This is the ultimate trap! When it comes to getting emails from our favourite online stores, resistance is often futile. To avoid some of these irresistible-yet-unnecessary purchases, there’s only one solution: unsubscribe from promotional newsletters.

You can avoid receiving these emails in the first place by unchecking the box that says “I want to receive the newsletters” every time you buy something online. Often, the box is checked by default (how sneaky!). This move will help you avoid some of these impulse purchases which are often fueled by sheer boredom. To limit the temptation even further, you can also force yourself to limit browsing online shopping sites to once or twice a week.

Another tip: Set a maximum budget for online shopping (for example, $100 a month) and make sure to stick to it.

Think before you buy

Have you fallen for a new dress? Think that sleek juicer you saw on Instagram will look great on your kitchen counter? Before clicking the “buy” button, give yourself a “cooling-off” period of several days (or even several weeks) to make sure you really need whatever has caught your eye.

Why this works: if you’re still thinking about your potential purchase after a week and are sure you really need it, indulge yourself. If, on the other hand, the dress or juicer that got your attention has left your mind, it’s probably not worth it. Over time, you’ll learn to distinguish compulsive shopping from buying that arises out of a genuine desire or need.

Make a list of your needs

Consider jotting down all the things you really need in a list. For example, new running  shoes to replace your worn out ones, a dress for a friend’s wedding, noise-cancelling headphones to better concentrate, etc. This exercise will allow you to understand exactly what you need so you can better understand the difference between essential buying and impulse buying. 

Learning to make this distinction will not only give your wallet a break, but is also a better choice for the planet since you’ll be cutting back on mindless consumerism—which leads us to our next point!  

Choose second-hand items

If you need something in particular, consider buying it second-hand. The second-hand market is booming, with an estimated value between 35 and 50 billion dollars. Many brands are getting on board by launching second-hand online platforms, and almost all sectors are getting in on the action: clothing, electronics, smartphones, furniture, etc.

Not only does buying second hand save you money and increase your purchasing power, but it’s more sustainable and better for the planet. By buying previously-owned items, you’ll still get that great feeling you get when shopping online, but with a less harmful impact on the environment.

Take advantage of cashback programs

What’s cashback? Cashback refers to getting a commission after making a purchase (usually online). Basically, the more you spend, the more money you get back. Some cashback sites, like Rakuten, offer commissions of up to 5% of the purchase price. Once the payment is made, the cashback is transferred to a dedicated fund. If you make large and/or regular purchases, cashback is definitely worth it!

Additinatelly, more and more banks now offer bank cards with cashback advantages, which allows you to earn a commission on purchases made with specific brands. 

Moka also offers cashback through Perks, where you’ll find deals and offers from brands you love, like Apple Music, Uber Eats and Indigo Books & Home. Just make sure you shop through the Moka app and the cashback will be deposited in your original Moka goal and automatically invested. 

Cashback shouldn’t make you buy more, but it’s a welcome bonus that makes shopping online slightly more affordable.

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Rent and food: How much should you be spending?

Here, we take a look at how much you should really be spending on rent and food and what you can do to lower these fixed costs.

How much should I be paying per month on food? 

Eating. Groceries. Cooking. We all have a love-hate relationship with food for a myriad of reasons. Planning your next meal can sometimes be fun, while other times, not so much. No matter how or where we consume it, we’ve all wondered: am I spending too much on food?

There’s no one size fits all answer to how much should be spent on groceries since how much food you need varies from one household to the next. Your food needs may be different from those of your neighbour: for example, a family of two adults and four children will have different needs than a person living alone.

The Credit Counselling Society estimates that you should spend between 10 to 15% of your budget on food. This means between $4,000 and $6,000 per year for a person earning $40,000.

If you feel that your food expenses exceed this percentage, here are some tips to help you spend less in this category:

1. Cook in large batches: This not only saves you time but also prevents you from wasting food. You also avoid buying pre-made meals during your busier times.

2. Avoid pre-made meals: Cooking for yourself is not only healthier but also better for your wallet.

3. Shop around for specials: Always be on the lookout for price reductions to save money. To do this, try using the Flipp app, which scans local grocery store specials every week.

4. Avoid processed foods: These are generally more expensive than raw foods. It’s also  better to chop, grate or grind food yourself to save a few bucks.

5. Plan your meals for the week and make a list: Having a plan will help you manage your expenses and budget your grocery spending. 

Am I paying too much for rent?

Housing expenses (rent, utilities etc.) are a significant part of everyone’s budget, so it’s important to pay close attention  and how much you’re spending on them every month. 

Rent prices vary from one city to another. For example, the average price of a one bedroom apartment in Vancouver is 2,100$ per month, compared to 1,350$ in Montreal. So, be sure to use comparables with the options offered in the same city.

To make your search easier, try using Zumper. It’s both a search tool for available apartments and it analyzes their prices.

If you think you’re unable to find an apartment or rent price that fits your budget, you can  always try house hacking: find a friend,relative or  colleague to share your apartment.

This will not only reduce your rent costs but also allow you to split other bills, like heating, electricity, internet—and even some grocery expenses.

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Make a change: Tips and tools to help manage your money

Remember, everyone’s personal situation is different, so the approach you choose should fit with your financial situation and life stage.

How can I manage my expenses?

Managing your expenses is a first step to achieving your financial goals. Understanding where your money is going will help you get a handle on what changes you need to make to ensure you’re living within your means and making your money work for your future.

To start, creating a spending plan is a useful tool to manage your expenses. To do so, you’ll need to track your spending so you can figure out where your money is  going every month. For a typical household budget, spending items are usually categorized into necessity expenses (essential expenses, like food) and discretionary expenses (non-essentials, like eye cream). 

Note that the non-essential expenses are the ones you can better control. The easiest way to reduce them is to do so gradually while balancing your quality of life.

Once you get a handle on  your spending habits, it will be easier for you to define your spending goals and set a  limit for each expense category, with the goal of  having cash leftover in your budget every month. 

You should also include a savings allocation in your spending plan to make sure that you don’t spend all of your money.

Once you’ve organized your budget plan, you should re-evaluate it every month to make sure that you’re on track.

Budget managing apps

There are a lot of apps out there that can help you manage your budget. They all have different methods and functionalities, so it’s important to understand what they offer and which features are most important to you.  

First up, we have Mint and Fudget. Both of these apps are free and user-friendly.  They use the estimated budget technique: at the beginning of the month, you estimate your expenses for each category. You then follow the monthly evolution of your estimated budget with what you’re actually spending and make adjustments as needed.

Mint also allows you to import your bank transactions automatically, making it much easier for you to manage your finances all in one place.

If you’re willing to shell out a few bucks, YNAB is also a great option for managing your budget. Just like Mint, it automatically imports and categorizes your transactions. The difference between the two apps is in the budgeting technique: YNAB uses an envelope method—a time-tested technique since before the invention of the computer!

What’s an envelope method? We know you’re at the edge of your seats so we won’t keep you in suspense: with the envelope method you assign  a job to each of the dollars you earn. By doing this, you categorize your available money instead of basing it on the money you think you earn. You then spend according to the money you have available.

As added value, YNAB also offers educational content such as podcasts and blogs, so you can keep learning about how to gain control of your money.

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5 tips for financial success in 2020

If you, like many Canadians, have a New Year’s resolution related to improving your personal finances, you’re in luck.

The beginning of the year (and decade!) is the perfect opportunity to get yourself set up for long-term financial success, and we’ve got some easy tips to help you do it.

1. Wanna move forward? You gotta look back.

Having goals keeps you motivated and gives you something specific to work towards throughout the year. But before you set those goals, take a look back on 2019. 

Figure out where you currently stand financially: 

  • How much do you currently have saved? 
  • Are you still carrying any debt? 
  • How much do you owe?
  • How much income do you have coming in?
  • How much money did you spend every month?
  • What did you spend it on?

Having this information will help you develop your game plan and will put you on track for major 2020 success.

PROTIP: Set goals that are SMART: Specific, Measurable, Achievable, Realistic and Time-Framed.Wanna move forward? You gotta look back.Want control of your spending? Create a budget. 

2. Want control of your spending? Create a budget.

We know, we know. Creating a budget doesn’t sound like much fun, but when it comes to money, ignorance isn’t bliss. 

The good news is that a budget is just a plan for your money and can be as simple or as complicated as you want. Check out this article for a quick 3-step budget. 

Of course, telling your money where to go is one thing. It’s also important to keep an eye on where it actually goes. Regularly tracking your spending will show you your financial habits, areas where you can cut back, and will help you stay on budget.

PROTIP: Download an app like Mint, YNAB, or Wally to do the work for you.

3. Don’t wanna miss a thing? Set calendar reminders. 

Time to get organized. Make sure you don’t miss important financial dates by putting them into your calendar now. 

This includes major dates like tax deadlines (April 30, 2020), RRSP contribution cutoffs (March 2, 2020) and car registration renewals. But don’t forget to put in when your car insurance is set to renew, or when service contracts (like phone or internet), subscriptions and memberships end. Knowing when things are coming up gives you time to research and shop around if necessary. 

PROTIP: Don’t forget to set reminders for any credit card payments to ensure you don’t negatively affect your credit score.

4. Want an easy win? Start small. 

At Moka, we’re big believers that the little things really add up. So if the other tips seem a bit overwhelming, don’t worry. Just find one small thing you can do now that’ll have a positive impact on your finances.

Maybe it’s cancelling that online subscription you never use, or downloading a personal finance podcast, or even just installing a handy money saving extension or app like Honey.

You might even find that this gives you the motivation you need to tackle the bigger tasks!

PROTIP: Check out this list of the best money-saving apps and websites in Canada.

5. Want an easy, stress-free solution? Automate everything.

You can create automatic payments for everything these days, from your rent or mortgage payments to credit card and debt repayments. If you’d rather not worry about finances for the rest of the year, just set it and forget it.

You can also automatically pay yourself first by setting up a recurring deposit from your main account into a savings or investment account on the day you get paid.

PROTIP: Want to reach your financial goals even faster? In addition to automatic weekly deposits, you can also automatically round up your purchases and invest the spare change with Moka.

Achieving your financial goals isn’t always easy, but by following these five tips, you’ll be starting the year off in the best position possible.

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How to get your bank to waive your Non-Sufficient Funds (NSF) fee

“Take my money!” said no one to any financial institution, ever.  

Most of us have had the frustrating experience of checking our bank accounts, only to find our bank has hit us with a non-sufficient funds (NSF) fee because of a declined withdrawal that exceeded our bank balance. NSFs are usually the result of a short-term cash flow issue, and getting hit with a double-digit charge from your bank when you’re clearly tight on cash, to begin with, can often feel like a low blow.

If you’ve been the recipient of one of these fees, we have some good news.  By following a few simple steps, you can usually get that bank fee reversed.  

What are NSF fees?

A bank will charge you a non-sufficient funds (NSF) fee when there is an attempt to withdraw more money than the available funds in your bank account. NSFs, or overdraft fees, can occur when a cheque is processed or when automatic charges are placed on your account, like a pre-authorized debit from subscription service, a scheduled bill payment, and even the bank’s own service charges. Canadian banks charge between $25 and $48 as an NSF penalty every time a transaction drops you below zero, even if you were only missing a few dollars to cover the cost. 

I got an NSF…now what? 

Ask to have the fee reversed. I promise you it’s that easy!  If your bank account is in good standing and if it’s the first time you’ve ever incurred an NSF (or even the first time in a while), your continued business is more important to the bank than the $45 they’re trying to collect.  When requesting to have your NSF fee waived, be sure to follow these basic guidelines. 

Be nice

It’s normal to get riled up about the fee, but wait until you’ve cooled down to make the call to your bank. Being polite goes a long way. Put on your best customer service voice, keep calm, and be friendly. Start the call on the right foot by asking the agent how their day is going, and letting them know that you’re sorry to bother them, but that you were wondering if they could help you with a problem you’re having. Put yourself in their shoes. Isn’t it always easier to be patient and helpful with someone that is pleasant, friendly, polite and just in need of a helping hand?

Be persistent  

If you’ve gotten NSF fees before or frequently defaulted on credit payments, it’s possible that you might be refused for a refund. Inquire how else they might be able to help you. There is magic in the question, “If you can’t waive the fee, is there any other way that you can help me?”. Encourage them to work with you to find a solution. The customer service agent that you’re speaking with usually has more empathy than people give them credit for, and the last thing they want to admit is, “I can’t help you”.  

Avoid NSF fees altogether

Follow these straightforward suggestions to prevent incurring a non-sufficient fund fee in the first place.

  1. Get protected
    Most banks have overdraft protection options that can be added to your existing account for a small monthly fee.  If you’ve had multiple NSFs in the past few months, this will probably be money well spent. Talk to your bank about the best solution based on your account and spending habits.

  2. Get reminded
    Many banks will offer an email alert service to notify you when your account balance dips below a specified threshold. This “heads up” can give you the time you need to transfer funds into your account or even reach out to the people or companies that might be about to process a withdrawal on your account and request a delay in the transaction until you have the funds to cover it.

    Pro tip: Put all your subscriptions and bill payments into your calendar with reminders and now you’ve got a single place to look when you want to see when scheduled payments are going through your account. This is also a good place to record the date your “free trials” end so that you can keep subscription-related costs to only the services that you really want to pay for.

  3. Get a new baseline
    Resetting your expectations around your bank account balance can help keep you out of the red. Keep a buffer in your bank account of $100 – $200 and consider that amount as your real zero.  When you get caught off guard with an unexpected payment, you’ll be in a better place to avoid an overdraft.

  4. Get a budget
    Set up a separate bank account that all of your bills and automatic payments come out of, and only use it to pay those bills.  As long as you keep that account funded with the amount of money you need to cover your monthly bills, you’ll always be above water. Then use a different account to manage your discretionary funds. Here’s a helpful monthly expenses template that you can use to plan a simple budget.

Plan for the unexpected

We all experience dry spells in cash flow. Planning for the unexpected and setting aside a little bit of money each week can ensure that you have cash in a pinch when times get tough.

The Financial Consumer Agency of Canada recommends that Canadians keep an emergency fund of three to six months of living expenses, but they also stress that any amount is better than nothing.

Pro tip:
Automate your savings with Moka and build an emergency fund by putting aside a little bit each week.

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Buy your cake and eat it, too: how to make your grocery budget work double time

Grocery shopping may take a bigger piece of your budget pie chart next year. In fact, a recent report predicts the average Canadian family will spend $411 more on groceries in 2019 due to rising food prices.

Luckily, you don’t have to overhaul your grocery list. These simple strategies can help you shave a little off each grocery bill, which will add up to substantial savings over time.

Plan ahead

It’s hard to plan for tomorrow’s dinner when all you can think about is what you want for lunch today. But a little bit of forethought is always a worthwhile investment.

If you need inspiration, sites like Supercook help by matching the ingredients you have on hand with popular recipes from all over the web.

Planning out a few meals for the week helps you buy ingredients you need and avoid throwing out food you don’t. Thinking ahead also means fewer trips to the store,so you can spend your time and money on something more fun. Like your aspiring polka band. Or Fortnite.

Make a list

Even if your mental recall rivals Sherlock Holmes’. Even if you took one of those photographic memory tests and somehow—against all odds—passed. Even if you once memorized all of Alice’s lines for your Grade 5 debut in Alice in Wonderland (she’s in every scene). You should still write out a grocery list.

Having a list in hand keeps your attention on track. You’re more likely to get in and out of the store without a meandering detour down the chip aisle.

It’s the same reason you’re never supposed to go grocery shopping when you’re hungry: you will fall prey to million-dollar-marketing, wind up with ice cream and mozzarella sticks, and have to come back the next day.

Get paid to shop

“Do you have a points/rewards/loyalty card with us?”

Sounds good in theory. But juggling multiple cards and programs isn’t easy.

Enter the next generation of integrated cashback and rewards apps. You can link them directly with your debit and credit cards and get cash rewards for shopping your favourite brands.

Some, like Drop, work on a points system—similar to a cash back credit card without a new line of credit. Different brands offer different points per dollar spent, and you can turn those points into gift cards.

Checkout 51 or Caddle are other options that focus specifically on groceries. Participating in one of their weekly offers adds up to a check mailed right to your house.

These apps focus on brands rather than stores, so you don’t have to change where you shop, and you can also shop online. Now you have an excuse to order those Wasabi Kit Kats from Japan.

Outsource your produce selection

What’s one way to save time and money and tackle the problem of food waste? Let someone else pick your fruit and veg for you.

Produce is expected to see the biggest price hike, with increases between 4 and 6 percent in 2019. One potential answer? The curated subscription box.

For a weekly fee, you can receive a box of pre-selected produce. Some companies, like Montreal’s Lufa Farms, focus on local produce. They even use new agricultural technologies to grow in urban zones. Others, like Flash Food in Toronto, deal exclusively in surplus produce—items a grocery store might otherwise throw away.

Subscription services save you time and money compared to picking out produce at the grocery store yourself. Plus, choosing organic, surplus, and local produce is a socially responsible way to shop.

Buy in bulk (when it makes sense)

Stocking up on bulk toilet paper and rice add up to big savings in the long run. But beware: bargain bulk stores like Costco are full of temptations more expensive than their $1.50 hot dogs.

Stick to household products and non-perishables with a long shelf life, and stay away from too much produce at the risk of throwing some of it away.

As you put together a budget for the new year, remember that a bit of forethought really adds up. Adopting small habits now can have a big impact on your long-term grocery spending. So you can buy your cake and eat it, too.

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How to crush your New Year’s resolutions all year long

Resolutions are exciting, but sticking it out can also feel challenging. Whether you have the hope to improve your finances or fitness, learn something new, or quit a bad habit, it’ll take persistence to achieve your goal.  Luckily, there are some easy things you can do to make your New Year’s resolution a reality.

Chart a path

When you’re tackling resolutions, mapping out your path to success in advance will keep you motivated throughout the year. What do you have to do every day, week or month to achieve your resolution before next January? Commit your plan to paper by investing in a planner or track your progress in an app like Productive, and turn to your map as a source of inspiration when you feel stuck or discouraged. Remember to plan for obstacles: detours are part of the process. Each day is an opportunity to start fresh.

Take it slow

A little bit every day will go a long way.  Want to start meditating? Flip on a free guided Headspace lesson for three minutes each morning and build from there week by week. Learning a new language?  Download Duolingo and practice Spanish for just 5 minutes every day.  Saving for a down payment? Start small by  investing your spare change with Moka.  Good things take time and just a small consistent effort will add up over time.

Celebrate your success

Keeping yourself motivated and mindful of how far you’ve come is so important. Celebrate the milestones, no matter how big or small. Were you under budget on your grocery shopping this month? Amazing. Did you shave a minute off your 3 km run? That’s huge. There will be many smaller success stories on your way to achieving your end goal, and they deserve recognition.

Another way you can celebrate is to bring your friends and family into your support system with a commitment contract like stickK. Wager friendly bets throughout the year as you work towards a happy and healthier you.  

Consider the cost

It’s vital to think about how much your resolution will cost. If you want to start working out at the gym or finally take that trip to Europe this year, then achieving your resolution won’t be free. Figure out how much you need to spend or save to achieve your goal, and check in every month to make sure you’re making the most of your money.  Unfortunately, 67% of people who sign up for gym memberships don’t use them, but the pre-approved payments will just keep coming! So before you lock yourself into an expensive service, find out if there is a more affordable way to ease into your resolution. (YouTube exercise classes, anyone?)

Invest the difference

If your resolution involves cutting back on something, like smoking or ordering fast food, consider investing the cash that you would’ve spent every week. Imagine a vacation purchased solely with money that would’ve been spent on burgers! You could also use the money you saved to donate to a cause that’s close to your heart.

Automate the process

Achieving your goals isn’t going to be easy, so why not take all the help you can get! Want to save more this year? Setting up a recurring deposit with Moka. will ensure you’re putting money aside every week without having to stress.  Resolving to decrease your screen time? Wean yourself off social media with Space, an app that will hide your social accounts from you when you want to disconnect. Want to learn to cook? Try out a food subscription box: there are always great deals out there for first-time subscribers.

Change doesn’t always happen overnight. If you fall off the resolution wagon,  just dust yourself off and get right back on up there! There’s no reason you have to wait for the next New Year to start again.  

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5 ways to (affordably) escape the cold this winter

Think winter travel is out of reach? Not so fast. You don’t have to stick it out in the snow this year if you’re willing to get just a little thrifty with your travelling. There are many ways to catch some sunshine without shelling out more than you can afford. Here’s how you can swing a winter getaway.

Don’t discount Europe

Let’s be real. It’s cold in Canada. Any temperature over 0°C can feel downright tropical during winter. If you like exploring cities, visit the Iberian peninsula—think Lisbon in Portugal and Barcelona in Spain—where winters are 30°C warmer than Montreal this time of year. Islands like Madeira, Crete and Malta also stay sunny throughout our Canadian winter. The best part? You’ll pay off-season prices. Bonus: You’ll also beat the crazy summer crowds.

A beach by any other name

If you’re craving a tropical locale but don’t want to burn your budget, look beyond the major beach destinations. A  vacation at a big name beach like Cancun can cost top sand dollar, but lesser known towns in Mexico like Troncones offer the same sunshine for a smaller cost. (Just be prepared for a longer commute from the airport!) You’ll save even more if you aren’t set on a room with an ocean view. Staying a few streets away from the beach will leave you with more money for margaritas anyway.

Live like a local

Forget fancy hotels. Rent a room in town where you can experience what it is like to really live in winter paradise. People who rent out their houses on sites like Airbnb can steer you away from tourist traps and share inexpensive ideas for fun. Imagine booking a room in Bridgetown, Barbados, discovering your host is a local club owner, and scoring an invite to hang out with her friends on Saturday night? You’ll see an authentic side of the place when you’re with the people who live there full-time, plus you can save on eating out by making meals at your new home away from home. And if you’re really about that luxury life (infinity pool, anyone?), a day pass for the hotel facilities should be cheaper than staying overnight.

Look for Boxing Week deals

During the holidays, booking last minute can actually save you money! In fact, international flights are 14% cheaper during the week of Boxing Day, according to affordable travel site Skyscanner. Look for discounts with major airlines and snap up the best all inclusive deal you can find. Air Canada Vacations is already offering up to 50% off this year for Boxing Day, and Air Transat, Sunwing and WestJet have all announced boxing day sales in previous years, so stay tuned.

New Year, new place

It’s tempting to want to get away from the chaos of Christmas and New Year’s, but it’s cheaper to fly in January or February than December. Sure, it’ll be hard to watch all those Instagram stories of everyone in Tahiti while you’re snowed in, but you’ll show them! When everyone else is back at work, you’ll be heading off to Costa Rica to swim with the turtles for a fraction of the cost. Plus, you can get the inside scoop about what to do from friends who just came from there.

Here’s an extra tip: The more you plan what you’ll spend (and what you won’t!), the more fun you’ll have when you’re there. While you’re on vacation, you should be taking a break from the daily stressors of your normal life. If you’ve planned in advance, you won’t have to think about what you can afford while you’re there. Plus, having a budget and sticking to it will reduce stress when you return home (because you won’t be waiting for a terrifying credit card bill).

Just remember, all the planning will pay off when you’re poolside sipping coconut water from an actual coconut. Don’t forget to pack sunscreen!

Spend less

How to get in the giving spirit without breaking the bank

Holiday shopping stressing you out? It’s easy to get carried away, but this time of year is really about spending time with the people you love, not spending all your money! Here are some holiday hacks for an affordable giving season.

Rediscover the gift exchange


Instead of shopping for every single person you’ve ever met, invite friends and family to join a Secret Santa. This kind of gift exchange is great for giving on a budget, plus it’s a fun way to spend time together and there’s no limit to how many people can join. The premise is simple: Participants are randomly assigned someone to bestow with a gift. Draw names from a hat (if you’re traditional) or use a free online name generator: We used Draw Names for Secret Santa at the Moka office.


For a White Elephant gift exchange, participants simply have to show up with a wrapped present. Each player is given a number that determines their place in line. (Alphabetical order by first name is one easy way to do it, but you can get creative.)  First up opens any present. Next up can either unwrap another present or steal an opened gift from someone. If your gift is snatched, you can steal another or head back to the pile. Limiting how many times a gift can be stolen keeps the game on track.

Santa’s Little Helper: Set a dollar limit for the gift that everyone can afford. Start a Google Spreadsheet where you can anonymous drop hints about yourself and other participants; this will help people decide what to buy. A fun seasonal theme can also inspire players.

Consider homemade gifts


Recipe jars are incredibly easy and versatile: Just pick up some mason jars and assemble the dry ingredients for anything from chocolate chip oatmeal cookies to coconut curry soup. If you personalize each jar with some ribbon and a note, you can completely skip wrapping paper. Plus, there’s absolutely no cooking skill required, and you can knock out all your shopping at the grocery store.


So you’re not Martha Stewart? Don’t worry. You can still hand craft something for a loved one, and if you’re not sure where to start I’ve got one word for you: YouTube. It’s incredible what you can do with some fabric and a hot glue gun, paper and scissors, or even dollar store Christmas baubles and an old wire hanger.


Isn’t time the most precious gift of all? Handmade coupons are a fun, personalized gift that don’t have to cost you anything. Write down your promise to do something together that the recipient loves (like playing a video game) or simply commit to liberating them from a household chore whenever they cash in the coupon. Humour is highly encouraged (i.e. This coupon is good for winning one argument.)

And don’t forget the gift wrap!


Fancy wrapping paper doesn’t come cheap, but beautiful packaging can really make a gift. Old newspapers, magazines, and flyers are totally underrated wrapping options that are both environmentally friendly and free. Try pages full of text for a modern black and white look or use the cartoon pages for something more colourful. Brown paper bags are also easy to repurpose and can be spruced up with twine and a sprig of Douglas fir or holly.

If you’re shopping this holiday season, figure out what you can afford first and then stick to the plan. There’s no need to completely freeze your account, but you don’t have to go in the red to prove you care. Afterall, the greatest gift you can give yourself is a debt-free New Year.