Daily Tim Hortons and Specialty coffee runs

Stopping for a $5 cup of coffee and breakfast snack each day doesn’t seem like a big deal, but it really adds up to more than $150 per month per person. In a year, it’s very easy for a couple to spend $3,000 on drive-thru convenience without even noticing.

Spending the extra time to brew coffee at home will free up that money instantly.

Food delivery apps

Ordering dinner using apps like Uber Eats or DoorDash might seem like a good idea on an exhausted weeknight. Fees, delivery costs, and tips add up to double what you spend on food.

That inexpensive $20 takeout order can turn into $40 before it reaches your door. Swapping to pick up your own meals or having convenient frozen meals stocked at home saves you hundreds each month.

Unused subscriptions

Streaming services, gym memberships you never use, and app subscriptions on auto-pay bleed money without you noticing. Since you’re spending $10-$25 here and there on different credit cards and different days, it seems harmless.

Go through your bank statements every few months and cancel unnecessary subscriptions. You’ll immediately free up consistent money.

High Canadian Bank and mutual fund fees

Canada charges some of the highest mutual fund fees in the developed world. These fees can devour 2% or more of your investment returns annually.

Paying $15-$30 monthly in checking account fees for not maintaining ultra-high minimum balances just rubs salt in the wound. Moving your money to fee-free digital banks and low-cost index ETFs allows far more of it to work for you.

Unplanned “Target-Style” trips to big-box stores

Going to Costco or Superstore for two things always ends up with a $250 bill for bulk snacks and household items. While buying in bulk can save you money, purchasing unnecessary items in bulk will just waste your money and food. Avoid small impulse buys by shopping with a predetermined, written list.

Small credit card balances month-to-month

It seems easy to carry a low balance on your credit card when you pay only the minimum due amount. But with Canadian interest rates hovering above 20%, even small balances can become long-term debt.

Before your next paycheck even arrives, interest is taking a silent bite out of your earnings. Use your credit cards like debit cards; pay your statement in full.

Upgrading smartphones on 24-month financing contracts

Contract phone plans from major Canadian carriers charge you an additional $30-$60/month for your device. It feels normal to pay upwards of $120/month per line because the price is packaged, but owning your paid-off phone cuts your bill in half. Families save thousands in a few years by switching to BYOD (bring-your-own-device) plans with discount carriers.

Name-brand groceries over house brands

Buying name-brand cereal, canned goods, and cleaning supplies instead of store brands such as No Name, Great Value, or Compliments silently costs you 20% to 30% more at the grocery store.

Ingredients for many pantry staples are exactly the same, but that extra percentage adds up by the end of the month. One of the simplest swaps to lower your food budget is trading brand names for store-brand versions.

Frequent gas station and convenience store pitstops

Gas stations or corner store stops for bottled beverages, energy cans, or junk food are extremely expensive compared to purchasing these items at your normal grocery store.

Spending $4 on one drink or $5 for a bag of chips several times a week can effortlessly leach away $50 or more per month. Bringing snacks and a reusable water bottle instead will allow you to keep that spare change.

“Buy Now, Pay Later” services for small purchases

Breaking up a $120 clothing or electronics bill into four small $30 installments tricks your brain into thinking you basically got it for free.

As various installment purchases get stacked on top of each other from paycheck to paycheck, they stealthily consume your future earnings and lead to surprising cash shortfalls. Be mindful of your little discretionary purchases and think of them as one-time deals.

Over-insuring older vehicles with low deductibles

Maintaining a low deductible on an older vehicle costs Canadians more than they need every month at the pump. Increasing your deductible just $250 to $1,000 could save you thousands on annual premiums and still cover you in case of serious accidents. An annual review of your policy with your broker can keep you from overpaying on coverages you don’t need.

Ignoring home heating efficiency in winter

Unsealed drafty windows, cranking up the thermostat, or otherwise ignoring heat loss will rapidly inflate your heating bills throughout the Canadian winter.

Low-cost solutions such as window insulation film and a programmable thermostat can net you savings of hundreds of dollars when it matters most. Seal up those small drafts around doors and windows to prevent your money from flowing out.

Buying lunch at work

It doesn’t seem like much. Paying $15 to $20 for lunch downtown three days each week is just part of working. But it adds up to over $200 per month per person.

Add stopping for coffee each morning, and daily food costs can exceed $3,000 per year. If you pack leftovers or make simple lunches at home, you’ll have that extra money for worthwhile savings or weekend activities.

Paying out-of-network ATM and transaction fees

Every time you use an out-of-network ATM or go over monthly transaction limits on bottom-of-the-line basic accounts, you’re charged $3-$7 in fees.

That $5 charge doesn’t seem like enough to sweat over when you make that decision, but several times a month adds up to more than $100 per year for absolutely no reason. Use your bank’s branded ATMs or get cash back at grocery stores instead.

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The annual cross-border shopping run

Crossing into Buffalo, Detroit, or Bellingham for a weekend of outlet malls, TJ’s runs and Target hauls was once a middle-class staple. But with exchange rates staying low, customs exemptions staying stubbornly high and prices rising fast north of the border too, the time-honored tradition of the cross-border deal hunt simply doesn’t make sense anymore.

Upgrading vehicles every four to five years

Some Canadians would trade in their car for a brand new one every four years when they finished paying their loans. That trend is rapidly disappearing.

New cars are expensive, and loan rates are steep. Average consumers are holding onto their cars longer than ever. Driving around in an older paid-off car used to mean you were cheap; now it’s just being frugal.

Holding onto the “cottage country” dream

A cabin in British Columbia (B.C.), a cottage in Northern Ontario or a chalet in Quebec was once considered the pinnacle of middle-class achievement. Today, with astronomical waterfront prices, skyrocketing municipal taxes and high interest rates, vacation homes are financially beyond the reach of most young and mid-career families.

Default 20% tipping at counter service

Pop-up card payment screens demanding large tips have sprung up at every store offering food services, from cafés to bakeries to counter service restaurants. Canadians still tip well at sit-down restaurants, but we no longer feel obligated to tip 18% or 20% for someone delivering us a simple cup of coffee. People are entering “Custom Amount” or declining to tip altogether, and they no longer feel guilty about it.

Shopping at one supermarket without price-matching

Doing all your weekly shopping at one upscale or mid-level grocery store because you can is a luxury few can afford anymore. Going to multiple stores for groceries, using circular apps like Flipp, price matching at the register, and generic discount banners like No Frills, Food Basics, or FreshCo have all been adopted by the middle class. Being loyal to one brand of grocer has been substituted with militant unit-price comparison.

The “detached starter home” pipeline

The traditional path of living in the suburbs has been shattered across our major metros. Once people planned on starting in a condo, then transitioning to a townhome, and finally graduating to a single-family home with a yard to raise kids.

Now families are readjusting their expectations and making homes for themselves in townhomes or two-bedroom apartments long-term.

Buying a backyard rink setup every winter

Typically, for some families in Canada, winters meant flooding a section of your backyard or having an outdoor ice surface ready for your kids.

Unpredictable and warmer winters in southern Canadian regions make natural outdoor ice patch upkeep aggravating. Additionally, it costs money for rink building equipment and water.

Spontaneous winter sun trips

Heading south for a spontaneous week in Mexico or the Caribbean to escape gray Canadian Februarys was once every working family’s annual vacation tradition. Rising airline prices, resort increases and hotel taxes have made yearly tropical vacations into logistical endeavors that need months, if not years, of point earning ahead of time.

Keeping two vehicles per suburban household

Two cars in the driveway was long considered a suburban living requirement. But between insurance, maintenance, gas, and car payments, many households are having to rethink.

Instead of two cars that can take anybody anywhere at any time, many families are choosing one dependable ride and supplementing with transit, e-bikes, flexible work hours, or the occasional car share.

Putting every child into organized hockey

Hockey is still very Canadian, but when families consider registration fees, equipment, tournament fees, travel, and other expenses, youth hockey can become pricey.

Competitive hockey also requires serious time and dedication from families, especially those with multiple kids. Some parents are opting for rec leagues, cheaper sports or even limiting how competitively their kids play instead of simply enrolling them in the traditional hockey pipeline.

Staying with the same Big Five bank out of habit

Undivided allegiance to the big banks is slowly crumbling. Canadians seeking better returns on their savings and lower fees on banking accounts are transitioning daily banking activities and high-yield savings accounts.

Neobanks, credit unions, and other wealth companies that provide better returns without $16/month account fees are taking over.

Making frequent runs to Canadian Tire for every household project

Running to Canadian Tire on the weekend for tools, automotive products, barbecues, lawn care supplies, or some other household improvement staple is nearly a suburban Canadian rite of passage.

However, families attempting to save money may delay discretionary projects, fix what they currently have, borrow a neighbor’s tools, or simply wait for one of Canadian Tire’s famous sales instead of making the purchase right away.

Buying coffee at Tim Hortons every morning

Your daily Tim Hortons run is about as cliché Canadian as consumerism becomes. But even small daily expenditures become significant over the course of a year, especially when factoring in breakfast and snacks.

Savvy budget commuters are trading travel mugs and coffee machines instead of takeout as they ditch their habit of swinging through drive-thrus each day.

Taking the whole family to an NHL game

Going to a professional hockey game used to be within reach as a family outing for middle-class hockey fans. Tickets, parking, food, drinks, and team merchandise at fan-friendly Canadian teams can add up to one pricey night. Catching a game from home, or even watching junior, university, or minor-league hockey is a great alternative.

Owning a boat simply because you own a cottage

For some cottage-owning families, there was another expectation that came with cottage ownership: eventually they’d buy a boat. But beyond purchase prices, there’s fuel, storage, winterization, upkeep, insurance, and repairs.

Renting, sharing, keeping an old reliable boat, or just paddling a canoe or kayak can make much more financial sense.

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Unsecured websites

When you enter your credit card info on a website you don’t know well (or that isn’t secured), you’re putting your account information at risk of hackers and identity thieves.

If you don’t see “https://” at the beginning of the web address or a small padlock icon in your browser bar, your information is being transmitted over the internet as plain text. For online shopping, it’s far safer to use a third-party payment processor or a single-use virtual card number.

ATM cash advances

Swiping your credit card at an ATM for cash will subject you to immediate fees (usually high fees) and interest rates much higher than your typical purchase APR.

Cash advances also typically come with no grace period, so you start accruing interest the second you take that first dollar. Building up a balance on your credit card with actual cash can get you into a vicious cycle of debt.

Wire transfers

Making a wire transfer or money order and funding it with your credit card is considered by nearly all credit issuers to be a cash advance, subject to immediate fees and astronomical interest rates.

Wire transfers are also basically impossible to reverse, so unlike regular credit purchases, there are no built-in chargeback protections. Transferring money peer-to-peer with a bank account or debit card avoids these extraneous processing fees.

Unaffordable purchases

Running a balance by charging big-ticket luxury items or impulse buys that you cannot pay off at the end of the month is the quickest way to dig yourself into revolving debt.

Financing your purchases will make everything on your card subject to high interest rates, which means even basic purchases end up costing you exponentially more. If it’s not an emergency, it’s always better to save up cash than finance your lifestyle.

Medical bills

When you put hefty medical expenses on a high-interest credit card, you forfeit any chance of negotiating the original bill or arranging affordable repayment plans with the provider.

Many hospitals and medical practices have interest-free hardship plans or income-based discounts that go away if you turn the bill over to a private creditor. By keeping medical debt off your credit card, you retain your consumer rights.

College tuition

Schools typically charge a “convenience fee” of 2% to 4% if you pay your university tuition bill directly with a credit card. This fee is assessed by the school’s credit card processor.

Credit card processing fees eliminate any possibility of earning points/rewards/cash back on such a large purchase. Federal student loans or a payment plan through the university bursar will have significantly lower interest rates.

Public Wi-Fi

When you use credit cards over open, unencrypted public Wi-Fi at coffee shops, airports, hotel lobbies or other public places, it gives hackers easy access to your information.

Attackers commonly sniff public Wi-Fi networks for credit card numbers, passwords and security codes with man-in-the-middle attacks that capture info in transit. Make credit card transactions when you’re on your home network or a secure Virtual Private Network (VPN).

Maxed-out balance

Maxing out your credit card if you are already close to your limit hurts your credit score tremendously. It increases your credit utilization ratio, which alerts credit bureaus that you are in financial trouble.

You also risk being charged over-limit fees by your credit card company. Using debit or cash allows your credit score to heal as you pay off the balance.

High-surcharge vendors

Some small retailers, gas stations and government entities impose excessive processing fees or credit card surcharges to pay for their own transaction costs. If a merchant charges you a 3% or 5% fee to swipe plastic, the additional cost wipes out any card rewards or cash-back benefits.

In these isolated instances, using cash or a debit card that doesn’t impose a fee will leave you with a lower overall price.

Mortgage payments

Few mortgage servicers allow direct credit card payments, and third-party services that facilitate it charge exorbitant processing fees, negating any rewards value.

Charging your housing payment will just turn a low-interest installment loan into high-interest consumer debt. If you can’t afford your monthly mortgage payment, it’s better to call your lender about forbearance options than to charge it.

Sources: Please see here for a complete listing of all sources that were consulted in the preparation of this article.

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