• Stephanie Hinds

How to start saving

Trying to save money can seem impossible.

In my first few years of university, I was determined to start saving to get ahead of the student loans that would be looming over my head after graduation. But I couldn’t understand why I was so bad at it. I blamed it on being in school and only working part-time. But I knew the real reason was because I wasn’t really trying. Sure, I had a savings account. I had two. But that didn’t mean they were working for me. I wasn’t working for me.

So I opened up a tax-free savings account (TFSA). I set up automatic deposits of $25 a week. That was $100 a month! Not too bad for a starter, right?

I found this easier than I initially thought it would be. With the money being automatically taken out of my account, I didn’t even have the chance to spend it. And if I did, it probably would’ve gone to something frivolous (read: chicken nuggets).

After just a few weeks, I cancelled the $25 weekly deposits and increased the amount to $75 every two weeks. This added an extra $50 to my monthly savings.

At the time, $150 a month was more noticeable than my initial contribution, but following the advice of Gail Vaz-Oxlade, I knew that I should be saving at least 10 per cent of my income, and I wasn’t there yet.

So finally, I started putting in $100 every two weeks. While it was still less than the recommended 10 per cent, it was what I was comfortable with as I was paying off student loans at the time.

Here’s the thing about saving—it works. No matter how small you start, you acquire money over time. There’s no ifs, ands or buts about it. It’s a foolproof formula. And seeing your money grow makes you want to save more and get better at it, and if you have the resources, you do.

Saving even helped me pay off my student loans. I would save $1000 at a time and make lump sum payments towards my loan. It made a way bigger dent than just the spare change I would throw at my loan whenever I could. Before I knew it, my OSAP was paid off, I had money in my TFSA and my half of a down payment for a house by 25!

Another good habit is to try living on cash. We might live in a credit and debit haven, but seeing where your cash is physically going can be a great way to make you want to hold on to it. Try withdrawing what you'll need for the week the day that you get paid and only allowing yourself to spend that. Keep what's in the bank in the bank!

Once you get into the habit of saving, it’s important that you diversify your money. This means looking into things like RRSPs, GICs and other forms of saving. TFSAs are great because you can have access to your money within 24 hours in the event of an emergency, but for savings you know you won’t want to touch, banks and credit unions have great options available.

If you’re looking to start saving but don’t where to start, just start somewhere—anywhere. It doesn’t matter if it’s $10 a week, the key is just to start. Over time, you’ll readjust your lifestyle to the shrink in disposable cash. But more importantly, you’ll become wiser about your money and stop feeling guilty for deciding you want to spend money on something, because you know that you’ve saved what you were supposed to.

If you fall and slip up, it’s okay. Just pick yourself up, dust yourself off, and get back on track!

#money #saving #TFSA #investments

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