Yahoo Finance 5 smart ways to save more each month
The past few years have stretched many Canadians and their wallets—so you shouldn’t feel alone if you find yourself looking over your expenses and struggling to find ways to save more, and more often. Luckily, you don’t have to go at it alone either.
Together with TD, we’ve come up with a few tried-and-true strategies for saving smarter, to help you feel more confident about your finances and ensure you’re covered in case of any unexpected curveballs, while keeping your larger financial goals in view and on track.
1. Begin with the basics
Having a savings plan and sticking to it is a major key to feeling more comfortable about your finances, but your plan doesn’t have to be overly complicated. For many savers, it requires three simple, yet achievable goals: work to pay down your debts, build an emergency fund, and save or invest.
Working to reduce your debt not only feels good, it’s also a smart move that lets you concentrate on building your assets. Once your debt feels more manageable, creating an emergency fund is a great next step. This can be used for unforeseen expenses, such as unexpected home, car or vet bills.
With manageable debt and a plan for emergencies in place, you can then shift your efforts to confidently save and invest for big goals like retirement, as well as nearer-term splurges like that vacation you and your family have been eyeing.
2. Pay yourself first
Good financial habits don’t happen overnight, but there is one step you can probably take right now without too much extra effort: start paying yourself first. Many financial institutions and employee savings plans allow you to automatically contribute a portion of your paycheque directly into your savings or investments.
Alternatively, you can also stow some extra cash in an envelope until you’re able to deposit it. However you do it, this sly trick effectively takes the emotion out of saving (or rather, not spending), which can be a little more difficult on payday when your bank account is flush. Added bonus? It’s a great feeling knowing that the money that is left in your account is spendable if needed, while any additional contributions you decide to make to your savings will put you that much closer to your financial goals.
3. Get interested in interest rates
Having access to credit at crucial moments can be a relief, but interest charges can add up if you’re not keeping tabs on them. Take a moment to review the credit available to you – credit cards, lines of credits and so forth – and the rates they charge.
A credit card can free up funds with a tap, but be mindful of high interest rates. If you plan (or need) to carry a balance on your card, you’ll want to look for a low rate card that gives you some balance when you need it. While there’s no crystal ball for emergencies, estimate how much credit you’d need in a pinch, then look for a card with an interest rate, annual fee and credit limit you’ll feel comfortable with.
Having a low interest rate credit card like the TD Low Rate Visa Card can help you feel better equipped to tackle both unexpected and everyday expenses. Until September 3, 2024, the TD Low Rate Visa Card offers an 8.99% promotional interest rate for your first six months from Account opening¹ and afterwards a 12.90% interest rate applies.
4. Reduce unnecessary expenses where possible
It can seem anywhere from tough to borderline impossible to free up extra funds, but if you’re able to take an honest look at your spending habits and monthly expenses, you can likely find a few areas to cut back.
For example, if that fancy latte you bought the other day left you feeling recharged and ready to take on the world, it was likely money well spent. That trendy fast fashion piece from last season that’s still hanging unworn in your closet? Maybe less so…
While you can certainly get value out of so-called “unnecessary purchases,” having a better idea of which expenses and purchases bring your life value – and which don’t – can help you identify potential areas to reduce your monthly spending. What’s more, finding areas to cut back can also help free you up to put that money to better use elsewhere, such as saving towards a financial goal.
As you grow in this self-knowledge, some red flags that can indicate low-value spending include purchases meant to impress others, impulse buys and recurring payments for subscription services you no longer use.
5. Make sure you’re saving in the right place
Knowing how to save is one thing, knowing where to save is another. Once you’ve attained some balance with your budget and want to start building your nest egg or setting money aside for an emergency fund, understanding the differences between the many savings and investing accounts available to you can help you grow your savings more efficiently and save more money along the way.
For example, a Registered Retirement Savings Plan (RRSP) is an investing account best suited for long-term goals; while it’s not ideal for emergencies, it can lower your taxable income in the near term, helping you save as you build toward your golden years, education or a home purchase. A Tax-Free Savings Account (TFSA), on the other hand, comes with more flexibility to help you save or invest for more near or long-term goals, such as vacations or unforeseen expenses, without being taxed on growth (more savings!).
If the idea of building a traditional nest egg appeals to you, look beyond your standard savings account. In today’s environment, some Canadian banks offer higher interest savings accounts with competitive rates that can help supercharge your savings while keeping your money easily accessible and close at hand for when you need it.
Once you have a plan in place to save, a low interest rate credit card² like the TD Low Rate Visa Card with an annual fee of just $25, can help you feel better equipped to manage your expenses.
Learn more about how the TD Low Rate Visa Card can help you find some balance with everyday and emergency expenses, and how you can take advantage of the Card’s low promotional interest rate offer here.
Credit Card product information mentioned in this article is applicable to all Provinces excluding Quebec.
¹ Limited time offer. New TD Low Rate Visa Account must be opened by September 3, 2024. For more information, visit td.com/lowratecard.
² When compared to a department store credit card with an interest rate ranging from 24.99% - 29.99%.
