How To Save Money (For Real)
Do you want to spend less cash and save up for the things that really matter to you, like a house or a stress-free retirement? If the answer is yes, then it’s time to learn how to save money fast and steadily over a lifetime. (Don’t worry, you can still order a latte — just one or two days a week instead of seven.)
July 16, 2021 in Learn
What does it mean to save money?
Saving money is key to managing your personal finances and cash flow over a lifetime. The money you put aside from your salary will pay for goals that you have, such as buying a car, as well as unexpected expenses that arise, like house repairs. Plus, saving money offers financial security if you’re unable to work.
Many Canadians are saving, but they also have outstanding debts. To increase your savings, then, you need to figure out how much money is coming in each month, and then make a budget. Once that’s done, you can take easy steps toward spending less money and paying down debt. The last crucial piece of the puzzle is putting aside cash for an emergency fund, as well as short-term expenses, such as getting new electronics; medium-term expenditures, such as going to university; and long-term goals, like retiring or moving to a country home.
That may sound like a lot, but it’s simple if you take things step by step.
How to save money: Strategies to use
Think you’ll never figure out how to budget and save money? Think again. There are plenty of easy ways to automate saving and cost controls, and daily financial habits you can adopt that will quickly become second nature. Here are some to try.
How to save money from a salary
Start by determining your monthly income and how much you typically have left over each month after paying for fixed and variable expenses, like debt payments, rent and groceries. This will help you figure out how much you have left to spend and put into savings — ideally at least 10 per cent of your take-home pay. Talk to your bank about automating payments from your main account to a savings account, so it’s taken care of for you.
Use your credit card to budget and save money
Did you know that you can request a change to your credit limit on your credit card to avoid overspending, and choose cards that will give you cash back or rewards? Read 6 Ways to Set Up and Stick to a Budget Using Your Credit Card to find out more. If you’re already carrying credit card balances, investigate how to consolidate these and other debts to lower your interest payments.
Stretch the money you have left after savings. Before making a purchase, ask yourself if it is something you want or truly need. (That includes services like takeout food, taxis and manicures, by the way, not just fancy new phones or clothes.) To avoid unnecessary or impulse purchases, wait before buying so you can really think it through. When you’re really tempted, visualize your savings goals and the dreams they’ll fulfill.
How to save money: Everyday tips and long-term tricks
Looking for some quick wins to save money fast? Easy swaps can really add up. For example, have a DIY picnic rather than picking up takeout.
Don’t forget the big picture, though. Negotiating lower rates and fees on housing, insurance and other fixed expenses will leave more money in the bank for you. Here are some other areas where you might be able to free up cash for savings.
Save money on groceries
When food prices are on the rise, one strategy is to never set foot in the store without making a grocery list first. Base it on a list of planned meals for the week and scan your fridge and cupboards as you write to avoid unnecessary purchases. Once you’re in the aisles, consider frozen fruit and veg that won’t spoil, and healthy beans or legumes that are cheaper than meat. Try no-name brands, stock up on staples when they’re on sale, and look high and low for the best prices. Also, you can learn how to coupon and try comparing prices using handy online flyers and mobile coupon apps. Take advantage of our Gold Reward or Cobalt Card to earn points on groceries.
Slash fees and get cash back
You may think certain fees are non-negotiable, but they might not be. One smart way to save a little cash is to call your service providers to find out if there are ways to bundle services for a lower price or to opt for no- or lower-fee products.
American Express offers Cards with varying benefits and annual fees, for example. If you’re looking to earn cash back, SimplyCashTM Preferred Card from American Express Cardmembers can earn 2% on all purchases.1
Trim housing costs
So many people want to know how to save for a house, but you may want to try an online buy-or-rent calculator first to determine what’s best for you financially, based on your income and region.
Whether you rent or own, buy secondhand furniture, research the lowest prices for appliances and electronics, and lower your energy use (and bills!) to get back into savings mode.
Maximize student savings
Wondering how to save money as a student? Offset high tuition fees by buying used textbooks and clothes and accessing university facilities, such as the gym and library. Be sure to ask about student discounts for everything, too, from software and app subscriptions to transit, stores and restaurants.
How to save money: Next steps to take
With all this info, you might feel like your financial to-do list is a mile long. But give yourself a pat on the back – you’re building good habits that will last a lifetime. By investing a little time each day — whether it’s working on your budget, cancelling an unused subscription that can save you money — you’re doing your part to grow your savings.