Curated by the CCS Education Team
We often get asked about the best ways to save. So to celebrate the 10th anniversary of Financial Literacy Month in Canada, we thought we’d share our top 10 savings tips all in one place. Savings doesn’t just happen. No one has extra money left at the end of the month. Savings takes planning and deliberate effort. In order to set up an effective and consistent savings strategy, start by figuring out where you stand financially. Here are 10 ideas to get you started:
1. Do, or Redo, Your Household Budget
Be honest and as accurate as possible as this is the only way to create something real and executable! From here, you can start to trim the spending fat and ‘beef up’ the savings. It can help to use an interactive budget planner to guide your process and give you suggestions. It also lets you juggle your numbers to quickly see where you stand.
2. Note What Can Be Trimmed in Your Budget
Some of the biggest budget busters are take out, fast food, and drinks you pick up on the go. Have you ever tracked how much you spend on convenience food and drinks? It’s a huge wake-up call for many! Use your new insight into this spending habit to make some choices and changes. Anything you can save here will go a long way to boosting your savings account.
3. Make Savings a Separate Budget Category
By treating savings like a monthly expense, we can be more consistent with our deposits AND leave less for discretionary spending that takes us further away from our goals. Determine a set amount that you can save each pay day and make this ‘payment’ just as you would your cell phone bill. Having fun is OK; after all, it’s your money. Just make sure all of your obligations are taken care of first, including savings.
4. Find Grocery Deals
Have you noticed how expensive groceries have become? Use flyers to locate the best prices, create meal plans around what’s on sale, be savvy as you compare prices, and shop at a discount grocery store to save some money on canned and boxed goods. Being aware of our shopping environment and getting cupboard and storable items at a less-flashy retailer can free up significant cash for ye olde savings account. Not to mention that any increased attention to our grocery items helps with making heathy/healthier choices too.
5. Avoid Bank Fees and Credit Costs
Bank fees and credit costs . . . can be expensive. Do you have a credit card? Two? Did you attempt to negotiate for the appropriate card and interest rate or just accept what was offered? A point or two reduction in the interest rate can literally save you hundreds of dollars annually if you carry a balance. Find a credit card with the rewards you want, but without a high annual fee. Ask your lender if they can reduce the interest rate on your line of credit, or apply for a lower rate on your mortgage. Banks also offer chequing accounts with low, even no, monthly fees. Don’t be shy, it’s your money at stake here. Ask, discuss, explore savings opportunities as you look for where to find the money to save.
6. Automate Your Saving
Automation is our friend: most financial institutions have programs in place to help you save, so why not take advantage of them? Just a loonie, toonie or whatever you can spare, automatically transferred into your savings account every time you get paid, will go a long way to ensuring you make regular and consistent deposits. Look mom, no hands!
7. Shop Off-Season
Many stores have items of relevance even after the ‘main event.’ If you’ve got room to store them, buy holiday decorations a year before. Pick up gifts throughout the year at seasonal clearance times. Check online for when retailers are likely to clear stock on specific items, or better yet – choose to be satisfied with a more frugal lifestyle. Significant discounts can be found, and the money you save can be siphoned into your savings accounts.
8. Adjust Home Comforts
Relook at your summer and winter thermostat settings. Can you turn the heat down just 1 degree in winter, or up 1 or 2 degrees in the summer if you have AC? A simple adjustment before the changes of a season take hold can reduce our spending on energy by up to 30% in some cases.
9. Remove Your Savings Account From Debit Card
We are our money’s worst enemy, and impulse buying is a good habit to break. Remove the ability to pay by debit from your savings account: make it as difficult as possible on yourself to access your savings (without locking it into something for months of course, unless that is what you want) to keep it safe from yourself. You can still get your money if you need it, but by making it harder to access, you give yourself time for sober second thoughts like “Do I really need more money for what I am about to do or purchase? Do I really need to do what I planned, or buy these items?”
10. Put Your Saving Plan Into Action
Any and all savings initiatives are moot unless you commit to your plan and follow through every month/week. Reducing a grocery bill by $50 is great but put that into savings. Reducing an entertainment bill by $75 a month is fabulous, especially once you add that to your accumulating savings. A well-planned and consistent savings initiative will create a good habit, build up your savings, and provide you with a stable financial future.
Learn More About Money During Financial Literacy Month
November 2020 is the 10th anniversary of Financial Literacy Month (#FLM2020) in Canada, and it’s important now more than ever to know how to effectively manage your money. Your financial wellbeing is our goal, and during this month, we have a variety of free events and activities you can join in on. Come and celebrate financial literacy and #LearnWithCCS!