TIP: A little amount invested in a tax deferred account each month can go a long way when compounded over a number of years.

SAVINGS TIPS

Are you saving 10-20% of your family’s annual income, as most financial advisers suggest? Not many people are, for one reason or another.  It’s not as easy as it seems... Here are a few saving tips to help you along the way:  

-         Set up weekly (rather than monthly) withdrawals to an investment account… Emotionally, the smaller amounts leaving your account seem to hurt less.

-         Start a change jar for big item purchases… At the end of each day, empty the coins in your pockets into a big jar for savings and don’t touch!  This is a helpful way of saving for a vacation or a big purchase without really noticing that you’re doing it. Loonies and Toonies add up.

-         When you finally pay off a big debt, consider rewarding yourself for a job well done… Perhaps a nice evening out to dinner and the theatre, or a day at the spa. Remember, you can’t be Ebenezer Scrooge all the time, and it will give you something to look forward to.

-         As soon as you receive a bill, use Internet banking to set up the bill for payment near the due date…  Don’t delay - you may forget and incur late fees or interest charges.

-         Most people don’t care for the word ‘Allowance’, but this is a great way to reduce spending... Provide an allowance weekly or bi-weekly to all your family members (including yourself).

-         Make saving a game…reward yourself for meeting your saving goals.

-         Avoid compulsive purchases… Go shopping with a plan and only buy things you need.  If you’re still tempted, hold off until the next time you shop. This way, you’ll have time to ‘cool off’ and reconsider.

-         Compare prices from the comfort of your home on-line... This is a helpful strategy before heading to your local store. You’ll be more aware of what to expect price-wise.

-         Limit borrowing money to major purchases, emergencies, and university or college education.

-         Always pay off credit card debt first… Credit cards typically have the highest interest rate going (unless you’re lucky and have a low-interest rate card). And don’t just pay the minimum balance - pay it all off, every month.

-         Track your spending for 3 or 4 weeks… This will help you pinpoint your spending habits and help eliminate unnecessary spending; it’s the first step in setting up your own budget.

-         Why buy new when used will do…  Buying secondhand items and purchasing used vehicles can help save thousands.

-         Grocery shop at discount and lower-priced food stores... This can save you hundreds of dollars a year. Always shop with a list and compare unit prices per gram with other similar products on the shelf. And never shop on an empty stomach; you tend to buy more when you’re thinking about your next meal.

-         Prepare meals at home… eat your breakfast at home, not on the road.  Prepare your lunch the night before and bring it to work. You would be amazed at the money saved per year by preparing your own meals (and skipping that beer at lunch).

-         Here is a tip that’s good for the environment as well as your wallet… Adjust your home temperature according to the season. Turn down the temperature in the winter and raise it during the summer months.