1. Switch to a No-Fee Bank Account
You might think that switching banks is a hassle, but opening a new account online is very simple.
Banking fees can take a chunk out of your money that would be better off sitting in your savings account.
Many online financial institutions are affiliated with major banks so that you can use their ATMs for free.
Plus, they often offer higher returns on your savings.
A few options include EQ Bank, Simplii Financial, and Tangerine, and others such as credit unions.
2. Round Up Spending
You’d be amazed how quickly small amounts can turn into massive savings.
Various services for Canadians round up your purchases to the next highest amount, reallocating your spare change into a savings or investment account.
This painless method helps you put money away without even thinking about it.
Options in Canada include Wealthsimple Roundup and Moka.
TD Bank offers a Simple Save Program without an app that allows you to save when you make a debit purchase, ATM withdrawal, or both.
They’ll transfer between $0.50 to $5.00 per transaction into a savings account.
3. Budgeting & Spending Limits
You can also use financial apps to manage your budget.
They provide a platform to view all your finances in one place for an easily accessible spending overview.
The best part is many are free!
In Canada, top apps include Mint, which helps you monitor your spending, balances, and budgets.
Plus, you can monitor your credit score.
Koho offers a reloadable Visa card that helps you limit your spending and an app that helps you budget and save.
It also includes the roundup feature we mentioned earlier that helps you save your spare change.
Plus, you get cashback on your purchases.
Wally is a straightforward app that offers basic personal finance options.
You can track your expenses, set savings goals, create budgets, and even scan receipts.
You can easily add your bank, PayPal, and credit card accounts.
4. Automate Savings
It’s easy to spend money that’s left sitting in your chequing account.
If you’re a person that looks at your wallet or bank account and spends every dime you don’t need for bills, automated savings could be a good solution for you.
You can either direct the money into a savings or investment account.
There’s no fee to set it up, and you can change the amount or frequency at any time.
The bank won’t take money out unless you have enough in your account to cover it, either.
TD Bank offers a pre-authorized savings or investment program, and the Simple Save Program mentioned above.
RBC has Save-Matic.
Just log into your online banking and choose the amount and frequency.
Scotiabank has an Automatic Savings Plan that ensures you pay yourself first.
CIBC offers the TFSA Tax Advantage Savings Account to set up recurring deposits to grow your savings faster.
Your money will grow tax-free too.
BMO has a Continuous Savings Plan that withdraws funds from your selected account and deposits the money into a savings or investment account.
If you deal with a no-fee bank, you can set up automatic transfers.
When you can, make payroll deposits into a high-interest account instead of a standard chequing account.
This is contrary to how most people handle their money, but it also makes plenty of sense.
Redirecting as much money to your savings account and be disciplined about not spending it.
Set up an automatic transfer to move a portion of your money into your chequing account so you can pay bills and stick to your budget.
The rest builds interest.
5. Eat & Drink at Home
Even if you only buy a coffee from Tim Horton’s a few times a week, that adds up quickly.
If you tend to buy your lunch or get deli takeout for dinner, that’s even more money that could be going into savings instead.
This doesn’t mean that you can’t treat yourself once in a while – you absolutely can! However, for one month, we suggest instead of buying your lunch everyday, make it at home and transfer the money you would have spent into your savings account instead.
It’s a simple way to see exactly how much you are spending.
Once you realize the impact on your finances, you will probably think about other options.
6. Cut Your Cable TV
With so many entertainment options available online, cable television is a costly extra.
Basic cable can cost upwards of $100 per month, while Amazon Prime costs $7.99 per month.
Netflix Premium is only $18.99 monthly.
Sure, providers entice you with packages, but the truth is even these will cost you a bundle.
If you’re a sports fanatic, consider something like DAZN or see if games are available through local TV networks.
7. Check Your Cellphone Expectations
Do you really need unlimited data, texts, and calls? Or could you get by on much less? Chances are you probably don’t need to spend as much money as you do.
The same goes for your phone itself.
Think twice before you buy the latest gadget.
Do you really need the latest iPhone? Every dollar you unnecessarily spend on your cellphone, plan, and accessories is money you could save instead.
8. Use a Gas App
If you’re driving a vehicle that depends on gas, look to save whenever you can.
Gas isn’t getting any cheaper, and if you drive a lot, fuel can consume a good chunk out of your budget.
Gas Buddy is a great option.
It offers gas prices based on your current location.
Just drive to the nearest gas station with the lowest price and save.
9. Sell Unused Items
Facebook Marketplace, Craigslist, Kijiji and other outlets have made it very simple to sell what you don’t use.
Plus, you’d be surprised what people want to buy.
Leftover building materials, tools, clothing, furniture, vehicles, gardening equipment, craft and hobby items, sporting goods, musical instruments, and office supplies are just a few.
If you haven’t used an item in a year, consider selling it for the extra cash that you can put into savings.
According to the Revenue Canada’s publication IT-490 Barter Transactions, if you occasionally barter non-business-related services or goods, the income isn’t considered taxable.
10. Spend Your Points
How many credit cards do you have that accumulate points? Do you rack them up every time you fill up your tank, shop online, buy groceries, or visit your local pharmacy? Do you even know how many you have and how you can use them?
Go through your wallet and check your reward cards.
Look up the point values and match what you need to what each card offers.
This can save you hundreds of dollars for just half an hour’s work.
11. Buy Second-Hand
These days you have so many options to buy high-quality goods second-hand.
Many people buy items on a whim and then discover they’re not what they expected.
They might not use them or try them a few times and then stop using them.
When you’re trying to save, think about every purchase you make.
Could you buy a used or refurbished item at a discounted price?
For instance, the Canadian Black Book states the average depreciation for new cars is very high – between 30 and 40 percent.
Buying a used vehicle is often a good choice to avoid the huge depreciation hit.
Frequently Asked Questions
- What is the 30-day rule?
The 30-day rule states that you should wait 30 days before buying a non-essential item. After 30 days, if you still want to buy it, you aren’t buying impulsively.
Often, you will realize that you don’t need it.
- What’s the 50-30-20 budget rule?
This concept was popularized through Senator Elizabeth Warren’s book, All Your Worth: The Ultimate Lifetime Money Plan. It suggests you should divide your after-tax income into three portions allocating 50% to needs, 30% towards wants, and 20% towards savings.