5 steps to start saving

Everyone wants to save more money. But turning intention into action can be challenging, especially when the cost of living rises.

According to numbers from Statistics Canada, the Consumer Price Index (CPI) grew 3.9% in 2023. Only after a 6.2% jump in 2022, it was the biggest change since 1991. The numbers for the first part of 2024 show the CPI growing 2.9% from last May to this May; slowing, but not stopping.

In environments like this, one of the best things you can do to strengthen your financial wellbeing is to start saving.

In today's world, where everything feels like it’s costing more, there’s never been a better time to start saving wherever you can. Having a built-up savings account pays off when the time comes to use it, so it takes pressure off your other financial goals.

Choosing when to borrow money can cost more, or less, depending on interest rates. But did you know that it can also impact how much you earn on your savings? There is an upside to inflation: You can use it to your advantage to save more with high-interest savings account (HISA).

Having and maintaining multiple savings accounts can help you stay aligned to your big picture goals. It’s even better if you have them in different registered accounts that align with your goals. Once you build up a savings account for short-term goals, you can use that and get the most out of your long-term investments.

Saving is the ultimate investment: the investment in life’s later years. Whether you’re buttoning up your retirement plans, or just starting to think about it, being proactive about saving will help you stay on track. The actions you take to save today will help build the retirement you dream of—your future self will thank you.

Borrowing money or paying with credit can be useful for your bigger financial strategy. But they come with extras you should consider, like interest payments. Having another fund to pay for big-ticket items will help you stay on track and lower how much you’re paying in interest.

A great way to strengthen your financial wellbeing is having a healthy rainy-day fund or emergency fund. Your rainy-day fund covers unexpected expenses, like new tires or a higher utility bill than usual. Meanwhile, your emergency fund is meant to cover 3 months’ worth of expenses if you ever needed the extra income. (But hopefully you don’t have to use it)

Saving doesn’t have to feel like scaling a mountain. These tips can help you save for your goals.

Trimming your budget down, even for a little while, can add up quickly; it doesn’t take long for a cancelled subscription that used to cost you $25 each month to save you $100. If there are things you can cut out without seeing a big impact, now is the time to do it.

Take stock of your spending in these areas for opportunities to save:

• Fitness (gym membership, fitness apps, gear, nutrition)
• Personal services (salon services, treatments, self-care)
• Dining out (takeout, delivery, celebrations)
• Streaming media (music, TV shows, movies, audiobooks)
• Fashion (clothing, shoes, accessories)
• Entertainment (sports games, concerts, cinemas)

Great money-saving habits are easier to sustain when you celebrate your wins. You can spend money on occasional nice-to-haves when you budget room for them. If you’re making coffee at home to save money, you could have more room in your budget for a latte on the weekend.

Now, it’s time to see how much you can save, and how often. The best way to do that is to start budgeting from the ground up and set up a model that works for you.

50-30-20

The 50-30-20 model takes your income, and divvies it up into three separate categories:

1. 50% to needs: Rent/mortgage payments, transportation, bills, groceries, utilities
2. 30% to wants: Shopping, entertainment, vacations
3. 20% to goals: Retirement, investments, debt payments, emergency funds

If you’re just starting to save, this could be a great method for you to try. 50-30-20 shows you quickly if you’re spending too much in some areas, and not enough in others.

Budget to zero

Budgeting to zero looks at your income and takes away your expenses, until you get to zero. You give every dollar you have a purpose in your budget, but you don’t necessarily spend every dollar.

This model is popular because it gives you the flexibility to adjust your budget and change where money goes if something comes up.

Gamify saving

Why not make a game out of saving? Gamifying your budget might be the key that helps you stay on track.

Here are some ideas to get started:

• Set no-spend days and invite friends to join in
• Challenge friends or family to see who can spend the least
• Find creative ways to stay under a monthly target

These aren’t the only ways to budget. Explore other ways to budget that could work well for you.

It’s easier to save when you don’t even have to think about it. That’s where pre-authorized contributions come in handy.

No one is immune to making impulse purchases. Waiting a day or two before buying can help you decide if it’s really worth it.

Building your savings takes time. Naming your accounts and celebrating milestones helps you stay motivated.