How to save more money
Saving money wasn't a priority for many Canadians over the last decade. Recent research shows that our savings rate is now lower than that of Americans, who had long been North America's spendthrifts. If you're ready to start putting away more money, here are some effective ways on how to save more money:
Track your expenses
Gather recent bank and credit card statements to look for recurring expenses for services you don't actually use - for example, gym memberships or online subscriptions - and cancel them. Ask providers for better rates on services you do use, such as telephone, Internet and cable.
Trim high-interest loans
Paying down high-interest debts means you won't have as much money to save in the short term. But reducing or eliminating your balances will increase your long-term saving power, because you'll spend less of your future income on interest payments.
Establish an emergency fund
Set aside 3 to 6 months' worth of expenses in a cash account to pay for unexpected costs so you won't have to dip into retirement savings if you hit a sudden financial snag.
Talk to your financial advisor about the types of accounts that can help you make the most of your money, as well as about the appropriate investments for you. For emergency savings and other short-term funds, you could select stable, easily accessible vehicles such as money-market funds. When saving for education or retirement, take advantage of tax-sheltered accounts such as RESPs, RRSPs and TFSAs. In general, it's wise to hold short-term savings in cash, and long-term savings in GICs and mutual funds.
Saving requires discipline and persistence. Craft a plan that balances saving and debt reduction, builds emergency savings and deploys your money as effectively as possible, and you can create a more secure financial future for your family.