So, here are six simple savings strategies you can put into action right now.
1. Determine your objectives
Living in the moment is important. But financially, it’s a good idea to think ahead a little bit. Before reaching 40, people often have to deal with paying off student debt, building a down payment, and having children. Obviously, you need some savings to enjoy the fun things in life, like travelling, going out, and treating yourself now and then. And for peace of mind, you also need an emergency fund. But one thing’s for sure: the more ambitious your goals, the more you need a solid financial plan.
2. Start to save
Saving is a pretty easy habit to adopt. Start saving systematically and decide on a realistic amount that you can afford to set aside regularly. With each paycheque, this sum will be automatically transferred from your chequing account to your savings account or into your RRSP or TFSA account. If you have expensive debts (with high interest rates, like credit card debt), it’s important to pay those off. In any case, you don’t have to wait until you’ve paid off all your debt to start saving!
3. Check with your credit bureau
Credit is important. And we’re not just talking about your credit card balance. A bad credit score can hinder your goals. It’ll be much easier to buy a home or rent your dream apartment if your credit score hovers around 760. Check your credit report to get a clearer picture of your situation. It’s free and it won’t affect your credit score. Find out what affects your score and adjust as needed. It may not be that much fun, but it’ll pay off in 3, 5, even 10 years.
4. Make a budget
As you get older, your priorities change. And new priorities mean new expenses. Take care to list all your sources of income and your expenses in a monthly budget. Review it every year or after any major change to your lifestyle. Things like replacing the muffler in your car or making an emergency trip to the vet can drain your wallet. Allocate part of your budget to building an emergency fund and building your savings.
5. Think before buying now and paying later
New car. Stylish furniture. The latest phone model. It’s easy to create new needs. Sometimes, “buy now, pay later” deals make things seem more accessible. However, if your income were to change, these payments would monopolize your emergency fund. Over time, you could end up falling even deeper into debt.
6. Find an advisor
You don’t need to be swimming in gold for this to be worth it – anyone of working age could use an advisor. Their job isn’t to judge your lifestyle; in fact, their goal is to help you make the most of your money. Consider them an ally in helping you to reach your goals in life. Meet with them once a year or after any major changes to your financial situation. Are you moving in with your better half? Get a new job? Baby on the way? Give your advisor a call.
Need help developing good savings habits? We’re here to answer your questions.