If you are like most people today, you are interested in keeping more money in your pocket. These three basic principles can make a massive difference to our financial well-being. Saving, saving, saving.
Saving enables us to reach our financial goals, whether for a down payment on our dream home, putting money aside for a car, retirement, or the inevitable emergency.
Unfortunately, Canadian savings continue to fall well short of the recommended level of 10% of net income. According to Statistics Canada, Canada’s household saving rate fell to 14.60 per cent in the third quarter of 2020 from 28.20 per cent in the second quarter of 2020.
The COVID-19 pandemic has had a tremendous effect, of course. Still, Canadians savings levels were at a low ebb even before COVID-19 hit the scene. Why don’t Canadians save? Well, partly because we do not learn to become savers or pay ourselves first. More often than not, today’s youngsters are more likely to spend all their pocket money as soon as it arrives than to save. Unhappily, it’s the kind of habit that follows young adults right up to their first paycheque.
Top Tip List
We’ve put together a top tip list that will help you and your children get right into the saving habit.
- Spend no more than 90% of what you make. The rest should go into savings. Pay 10% to yourself first, then work with what is left in terms of spending and giving. Try it for 28 weeks until it becomes a habit. Though things may be tight to begin, start with a small amount and build from there. Many bank accounts offer automatic saving features that make it even easier to save
- Add a little more to the amount every few months – you’ll be surprised how quickly its get to be a habit
- When supported by your employer, try saving through payroll deductions at work.
- Move savings into another account where you have to pay to withdraw money, so that it is not so readily accessible
- Focus on creating an emergency fund of at least three months of living expenses. Once you have achieved three months, continue until you have six months. Now, that’s cause for celebration!
- Use various saving account features to spark your savings and watch your money grow. Options like RRSPs, RESPs, TFSAs and other savings tools can help you get more from your savings
Make saving a fun family project teaching your kids to save. Even children as young as 4-5 years can get into the spirit
Of course, saving may not be possible when you are out of work. In that case, it is a matter of starting as soon as you can.
By developing the beneficial life habit of saving today, you’ll get to keep a lot more money in your pocket tomorrow!
If you are debt and need help getting started, contact us and we will connect you with one of our knowledgeable non-profit credit counsellors.