The right saving strategy involve taking steps that allow you to save the money necessary to achieve your short, medium or long-term goals. Here are some tips to help you build the best strategy for your needs.
Most importantly, forget the long-established rule that says you should put aside a certain percentage of your salary into your savings account.
“People’s situations and goals vary greatly, so it’s best to establish a tailor-made strategy with an advisor,” says Natalia Sandjian, Financial Planner and Senior Advisor, Investment and Financial Planning at National Bank.
It all depends on your life goals.
As every situation is unique, choosing a competent advisor with whom you are comfortable is essential.
“They will help you consider your needs and ask you the right questions for your situation, objectives and life goals,” explains Natalia Sandjian.
To save efficiently, you’ll benefit from analyzing your budget and making corrections if necessary.
“Calculate your income and expenses to see if there’s room for improvement, such as giving up your daily $5 coffee,” explains Ms. Sandjian.
To stay disciplined with your savings over the long term, consider systematic savings.
“In the beginning, you’ll feel the impact of these transfers, but you will get used to it. Eventually, you’ll forget about missing the money, and you’ll be saving without even realizing it,” continues Natalia Sandjian.
This will also allow you to accumulate an emergency fund, “a safety cushion to have in place to keep you afloat financially in case of unforeseen expenses,” explains the expert.
Once you determine your objectives, you can concentrate on saving for a short-term goal (less than three years), such as your next trip. In order to quickly accumulate the amount you might consider opening a high-interest savings account.
“Everyone should have a high-interest savings account for their goals because it’s easy to use, the funds are accessible immediately and there is no tax impact when you withdraw money,” explains José Manuel Rodriguez, Product Manager, Investment Solutions at National Bank.
The advantage? You can manage your high-interest account online and set up automatic transfers of $50 a week. After one year, you will have saved $2,600 and can take a trip without going into debt!
The benefit of medium-term goals (three to eight years), such as major home renovations, is that you have time to implement a good saving strategy.
“If you need to save $25,000, divide your goal over five years, 12 months, or 52 weeks. By doing this, you will realize that it’s more feasible than you originally thought,” explains Natalia Sandjian.
You can exceed your objective of $25,000 in five years, not including interest, if you save $100 a week.
“After speaking with your advisor, you could decide to put your money into a Tax-Free Savings Account (TFSA) by choosing investment vehicles that respect your investor profile,” adds Natalia Sandjian.
For long-term goals (eight years or more), such as paying for your child’s education, the amount you put aside every week could make all the difference.
Thus, $10 a week would allow you to save $10,400 in capital after 20 years. Add to this amount government grants if you have opted for a Registered Education Savings Plan (RESP) and the return, which will vary depending on your type of investment.
Among your objectives, you will also need to save for your retirement.
“Your advisor will consider your different objectives, analyze your options and create a realistic and efficient plan for you to achieve this,” says Natalia Sandjian.
By implementing tailor-made saving strategies, you will better your chances of achieving the goals that are important to you.
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