Whether you’re an old pro at saving, or you’ve never saved a day in your life, it’s never too late to start! Most financial experts recommend that you have 3 to 6 months income in an emergency savings fund. This is a cushion in case you lose your job, are hit with essential home repairs, a fire, or any other sort of emergency. Above and beyond providing short-term security if you fall on hard times, your savings can also help you plan out your future. Your ability to afford a house, vacations, retirement and numerous other things will depend on how much money you have saved!
Below are 10 easy saving tips to help you make the most of your money so you can afford all the important things that lead to a fulfilling life.
- Create a budget.
The first step to building up your savings is to know where all your money goes each month. If you know where you’re overspending, and where you have wiggle room to cut back, it’s easier to know how much you can realistically save.
- Set goals for yourself.
Being realistic is often the most difficult part of saving, and creating a budget for yourself. It may seem like it should be easy to cut back, but it’s not! Be realistic and set achievable goals. If you try to do too much, too fast, you’ll miss your goals and get discouraged before you even get out of the gate.
- Set up a separate savings account.
In order to resist the temptation to spend the cash you set aside each month, make sure that you have a designated savings account that is strictly for saving – that means if the money goes in, it doesn’t come out! Ideally, you shouldn’t have any debit cards attached to it, either. Save those for your chequing account.
- Know your needs versus your wants.
You need to pay your rent. You don’t need an unlimited cell phone plan. Sure, it’s nice to have, but you can get by without one if you’re careful about how you use your plan. Think carefully about what is important to you. Do you need it to live, eat or work? If it doesn’t fall in one of these categories it’s probably not an essential.
- Think about your future.
Thinking about what comes next in your life can be a scary thought if you don’t have a financial plan. That’s why it’s so important to take a moment to think about where you want to be in a few years, and make sure that you’re taking the appropriate actions to get there. If you don’t think about where you want to be in 5, 10, or more years, it’s difficult to come up with a financial plan to get there. Don’t forget to factor in anything that will change your financial situation such as your education, job, spouse, kids, paying off loans, and big purchases like a house or a car. Once you know where you stand, it’s easier to decide how much you need to save to make your goals for the future a reality.
- Set up an automatic deposit.
If the money comes out of your account automatically, you’re less likely to be tempted to spend it elsewhere. By segregating your savings from your spending money, there’s no doubts about what money is available for spending, and what money is emergency savings money. Most banks will help you set up an automatic transfer that occurs on a set schedule, or when you receive your pay-cheque.
- Sell things you no longer use.
That treadmill that’s now gathering dust under the bed? Last year’s phone? Video games that have been played through? Most of us have some of these items hanging around our homes. Selling them on sites like Amazon, Kijiji or eBay can net you some extra money for saving. While it most likely won’t be what you paid, if you don’t use the items, it’s worth clearing out the clutter, and making some cash while you do.
- Opt for the smaller package or bundle.
Do you really use all the extra movie and sports channels on your cable bill? Do you really need a city-wide gym membership? One of the easiest ways to save is to cut back, rather than cut things out entirely. Can you get away with a more basic cable package, or settle in at a single gym location? You can net significant savings by eliminating the excess in your life and sticking with the basics.
- Save loose change at the end of the day.
Need a physical representation to feel like you’re accomplishing something with your savings? Collect all your spare change at the end of each day and set it aside for saving. When you get home, have a designated jar where you deposit all your coins (and small bills if you’re feeling generous!). When the jar is full, take it to the bank to deposit in your savings account, and start all over again. Most banks will have coin counters, so you don’t even have to tally it up yourself.
- Save bonuses, tax returns and rebates.
Often when you net a little extra income from something like an income tax return, a bonus at work or a rebate from something you’ve already purchased, your first instinct is to splurge and buy something you wouldn’t normally buy with your regular salary. Instead of springing for something you don’t really need (you’ve gotten by without it until now!) deposit the money in your savings account. Since it’s extra income above and beyond what you would make ordinarily, you shouldn’t miss it if it’s set aside for saving.
Remember, saving doesn’t have to be a chore. It’s the little things that add up over time! Change those small bad habits that you don’t even think about and in no time you’ll be on your way to a full savings account!
If you need a little help to get past a rough financial patch and your emergency savings aren’t cutting it, Magical Credit offers cash loans to people currently receiving government income such as unemployment, maternity leave, pension. Check here a more complete list, or fill out our loan application.