Saving money is important, but not everybody takes it seriously. In fact, the average Canadian only has around $1,100 in their savings.
If you’re looking to save some extra money, you’re not alone. Luckily, there are things you can do to make it a lot easier. Let’s talk about some of the best ways to save money in 2021!
1. Best Ways To Save Money: Check Your Expenses
Do you use your debit or credit card for basically everything? Perfect, you made it a lot easier. If not, look among all of your statements and find out where you’re spending the most money. Look at every individual purchase and add up each expense for every category.
If you spend $4 on coffee every morning, you may be a little surprised when you see it add up to $120 for the month. If you spend $15 on lunch every day, that’s $450. Look at your monthly subscriptions and add them all up, along with your bills, entertainment purchases, shopping, groceries, gas, and more. Find out how much you’re spending on each.
2. Create A Budget
That means downsizing your monthly expenses. Once you find out where your money is going, it’s a lot easier to control. If you’re spending a lot of money eating out, try packing a lunch to work or eating at home more. You’ll be surprised at how much that simple step will save you.
If you have a lot of subscriptions to streaming platforms, it may be time to downsize. Nobody needs all of them at once, especially if you’re binge-watching one show at a time. If you keep Netflix because you watch one or two movies on it every month, it would make more financial sense to rent them on a different platform. Canceling two $10 subscriptions will save you $240 over the course of a year.
If you go out with friends on the weekend and wind up spending a lot, this could save you a fortune. Opt for activities that are less financially draining. Of course, it’s okay to spend some money when you’re with your friends, but it shouldn’t be killing you. Spend the day at one of your homes, go for a hike, have a bonfire, or do anything that doesn’t involve over-spending.
If you spend a lot on clothes, try shopping at the thrift store. If you find coffee is a big expense, make it at home. You can’t do too much to your bills unless you try refinancing your loans or canceling services you don’t use. The budget will primarily cut into your fun money, so keep looking for ways to save.
Don’t just plan it in your head, either. Sit down and write a budget so you can stick to it.
3. Increase Your Income
If you’re able to cut your expenses, great! You can also try to find ways to increase your income. Asking your boss for a raise is a good way to start, especially if you’ve been with the company for a while. If not, you could also ask for overtime hours or extra shifts.
Alternatively, you could take on a part-time job or a side hustle. You could drive for Uber or Lyft, deliver for Doordash, try freelance writing, tutoring, or anything that interests you. Side hustles are a great way to increase and diversify your income, and you could deposit it all directly into your savings if you want!
4. Set Goals
Set a savings goal, but not just one. Set a “stretch goal” and a minimum goal for your savings, and make them periodic. For example, having a one-year goal is great, but it’s easy to forget about. It seems daunting and difficult to follow through.
Break it up into monthly or even weekly savings goals to make sure you stay on track. Let’s say your minimum savings goal for the year is $5,000 and your ideal savings goal is $12,000. Well, aim for $1,000 every month and stick to it. Focus on the difficult one because even if you wind up short, you’ll still be ahead of where you were without reaching.
5. Make Automatic Payments
Set it and forget it. Have your paycheck split into two accounts with the percentage you want to save so you never even think about spending that money. You can also make automatic transfers from your checking account once every week or once every month.
There are also investment tools like Moka that can allow you to make automatic round-up payments and it will invest your money for you. For example, if you buy a sandwich for $7.46, it will round up the payment to $8 and put 54 cents into the stock market for you. You can even make recurring monthly or weekly payments on top of the round-ups to maximize your savings goals.
6. Maximize Your Deductions
When it comes to tax time, make sure that you’re writing off everything you can. If you’re an independent contractor or otherwise self-employed, track all of your business expenses and keep them in one place throughout the year. When tax time comes around, make sure you’re getting every deduction possible.
If you’re an employee, there are still things you can write off. If you have a side hustle, you can really maximize your tax benefits and get a larger refund by writing off any expenses associated with the side business. Sometimes, those expenses are things you’d be paying for anyway.
For example, if you drive for Uber or Lyft on the side, you can write off your car insurance, your cellular bill (the big one in Canada), car maintenance, and more.
7. Go On A Spending Fast
Choose a time that works for you to avoid spending money on any unnecessary purchases. Have your groceries ready (and try to save on them), pack your lunch, go for a walk or a hike, and relax at home. Plan leisurely activities that don’t require spending and carry it as long as you can.
Alternatively, you can make this a regular occurrence. Choose “no spending” days every week or every month where you try not to spend any money at all. This could save you hundreds of dollars every month without even realizing it, and even help you realize what you can live without.
8. Pay Off Your Credit Cards
Avoid all high-interest debt. We know it will hurt your checking account in the short term, but you’ll save a lot in the long term. Debts with higher interest rates are not worth holding onto. If you pay 20% APR and you have $10,000 in credit card debt, you’ll wind up with an extra $2,000 in debt at the end of the year. It’s definitely worth it to take the immediate hit and be done with it.
9. Sell Your Stuff
Do you have a messy garage, attic, shed, or basement? Don’t lie to me.
If you have a lot of stuff you don’t use, there’s no point in keeping it around anymore. Clear your clutter, create a more inviting home, and make some money in the process.
If you have a lot of stuff, host a garage sale and try to get rid of it. Selling a lot of stuff for cheap will still leave you with a pretty penny. If you have a smaller amount of stuff you don’t use, especially if it’s more valuable and in good condition, sell it online for a higher price.
10. Be Consistent
If you’ve read everything on this list and decided to implement all of them, you would be wasting your time without consistency. Doing one savings fast, renewing your subscriptions in a month, and otherwise continuing your habits will not help you with your long-term savings goals.
Write a budget, double down, and stick to it. Get rid of all unnecessary expenses, stop wasting money, and try to increase your long-term income. You’ll be amazed at how far it will take you if you stay on track. That’s why it’s important to have short-term goals to monitor as you go and a prize to keep your eyes on down the road!
Have Fun With It
Now that you know some of the best ways to save money, you’ll quickly realize that some of the best things in life really are free! You don’t need to sit in a fancy beer garden or shop at high-end stores to have fun. There’s plenty you can do to enjoy life without breaking the bank. Be consistent, save your money, and let us know how we can help!