The thought of saving for something, whether a short-term or long-term goal can be overwhelming for anyone. This simple and easy guide will walk you through eight steps to achieve your financial savings goals. You have already taken the first step by simply visiting this page!
With the increased use of payment technology, you may be spending more than you realize. By keeping track of what you are spending your money on – everything from your morning cup of joe to your carwashes – you will get an idea of your spending habits.
Once you have collected your financial data, you can organize the expenses into various categories such as groceries, household, entertainment/sports and bills. You should also review your Credit Card and Credit Union statements to verify all charges.
After determining what you are spending your money, you can create a personal and/or household budget to assist you in managing your expenses. Your budget should take into account your earnings and financial responsibilities and your expenses should not exceed your income. Your budget should include a savings category for unplanned expenses or the creation of a nest egg.
Tip: Most Canadians save between 10-15% of their annual salaries however, start by saving what you feel comfortable with.
Tip: Create a savings account easily by following the annual savings chart
If your expenses are so high that you can’t find ways to build a savings, you may consider cutting back on some of your spending. You can analyze your spending trends to determine nonessential items that you can either cut out or spend less money on like gifts or dining out. You can also look for ways to save on fixed monthly expenses such as switching cell phone or internet providers.
Here are some ideas for monthly cost-savings:
It can be easier to save when you have a goal in mind. Start by thinking about what you may want to save for-a vacation, a new car or house-and then figure out how much you may need and how long it will take you to save for that item and/or event.
Here are some examples of short and long-term goals:
After income and expenses, your goals will likely have the biggest impact on your savings. You can start by making a list of short and long-term savings goals and prioritize the items on each list. This way, you will know what expenses you will need to save for. While there may be times that an expense arises that you didn’t account for, you may be able to use some of your savings and adjust your priorities and accordingly.
Motor City has several savings mechanisms that can assist you in your short and long-term goals:
You may choose to have a weekly or monthly automatic transfer from your primary chequing account to your savings account. Or, you may opt to have a payroll deduction deposited directly to your savings account. Another option may be to have your Interac debits rounded up to the nearest dollar and the difference between your purchase and the nearest dollar be deposited to a savings account.
Review your budget and check your savings account monthly. This will allow you to identify further savings opportunities or fix any problems that you may see in your current budget. At the beginning, your budget may be a work in progress, you may make adjusts but, eventually, you will develop a plan that suits your needs.