But how do you save for the future?  Simple: the same way.

You open a savings account at your bank, and every pay day you transfer a set amount ($50, $100, or whatever you can afford) into your savings account.  That’s the money you use for savings (like for a new car, or Christmas), but it’s also your reserve fund for unexpected expenses (like major car or house repairs).

The secret is simple: put away money from each paycheque, so that the money is there when you need it.

Of course it’s easy to say, but it takes some discipline to put it into practice.

If you are disciplined and can stick to it, our tips onhow to make a household budget are great.

But if you are like most people, you don’t want to spend your days playing with spreadsheets, and recording every dollar you spend.  It’s like a diet: you want to eat sensibly, but you don’t want to have to record every single calorie.  So what’s the solution?

Don’t budget.

Read our report on how NOT to make a budget, or watch this video for more details.

There are obvious warning signs of financial problems, like getting collection calls, and having your wages garnisheed.  There are less obvious signs, like a pile of unopened bills on your kitchen counter, or problems in your relationship because you and your spouse are arguing about money.

Money problems don’t go away on their own, so take action.

Start by taking our freeRecognize the Warning Signs of Money Problems Quiz.

Then watch this video about the warning signs of financial problems.

Then, contact an expert for help to solve your money problems.

Set your Priorities.

Here’s a video that explains:

But making a budget is hard.  Keeping it up is even harder.

So, don’t budget.  If you are not mathematically inclined, and you think you won’t succeed at budgeting, don’t.

Read our article on how to NOT make a budget for the secret to money management without budgeting.

That’s a difficult financial position to be in, so if you are under that level of stress, the starting point is to make a very detailed household budget.

If you know exactly where your money is going, you have the best chance to deal with this added financial stress.

Banks want you to get a debt consolidation loan, and payday loan companies, of course, want you to get a payday loan.  Of course payday loans are not the answer to your financial problems, and a debt consolidation loan may or may not be the answer, but when you talk to a bank or payday loan company, that will be their advice.

Credit Education Week is sponsored by banks, credit card companies, and payday loan companies, so they will generally try to “sell” you the solution that works for them.

Of course bankruptcy trustees are also biased.  They will want you to file a consumer proposal or file personal bankruptcy in Canada.

So today’s tip: before you talk to anyone, be sure you understand what they are selling, to ensure you are getting unbiased advice.

Gail Vaz-Oxlade, host of the TV shows Till Debt Do Us Part and Princess, is suggesting that it’s time to School Lenders, meaning they need to learn that, in her example, giving a 21 year old person who makes just over $20,000 per year $15,000 in unsecured credit is crazy?

So, today’s tip of the day: think before you borrow.  Just because the bank offers to lend you lots of money doesn’t mean you should take it.

Avoid Debt Settlement companies unless you fully understand how they work.

For the program to work, you have to stop paying your creditors – you then fall behind, compromise your credit rating, and run the risk of having your income garnisheed. Worse yet, the creditors may not agree to the settlement that the Debt Settlement Company offers to them. Wouldn’t it be awful to pay all of that money to the Debt Settlement Company, have your credit ruined in the process, and still owe the money?

Research your debt consultantbefore you sign anything, and be aware of your options.

Don’t take money out of your RRSP unless you calculate the amount of tax payable and set that amount aside to give the government at tax time – RRSP withdrawals are taxable, and even though your financial institution will withhold some tax, it is most often not enough. You don’t want to pay off a credit card only to have a tax liability next year that you can’t afford to pay.

Here’s the problem: if you take out $1,000 from your RRSP, the bank withholds 10% tax.  However, when you file your tax return, that $1,000 gets added to your income, and if your marginal tax rate is 40%, you owe an additional 30% in taxes.

So, if you do cash in an RRSP, calculate the full tax owing, and pay it now.