By Amy Cronkwright, Financial Advisor at Spire Advisors of Assante Capital Management Ltd.
The process of “saving more” involves four steps, and we find that when clients follow these steps, they are usually very successful.
Step one: Establish where your money is going
If you want to start saving more, you must first determine where your money is being spent. You can start this process by closely reviewing your recurring monthly expenses: housing, utilities, food, transportation, cell phone/internet, insurance, debt, etc.
Step two: Create a budget
After you review your expenses, the next step would be to create a spending plan and stick to it. This is called a budget—and not many people like this word, but it’s an important practice that can help you:
1. Stop spending more than what you make.
2. Pay down, and eventually eliminate, your debt.
3. Create an “emergency fund”.
4. Funnel more money into your savings account(s).
Step three: Direct more funds towards your savings
When you want to funnel more money into your savings account(s) there are five main “action items” you can follow, in order to be successful:
1. Make sure your budget includes regular contributions to your savings account(s).
2. Set up bank instalments that go into your savings account(s) automatically.
3. Don’t overwhelm yourself. Start small and increase the amount when you’re able.
4. Stick to the plan—and keep it a priority.
5. Meet with an advisor to help you invest your savings wisely.
Step four: Follow the “savings tips” below
• If you get a raise, consider investing it. (Getting a raise doesn’t mean that you need to increase your living expenses to match its size. This is money that can go right to your savings.)
• If you get a bonus, a tax refund, or a windfall, consider investing it.
• Take full advantage of your employer RSP contributions.
• Reduce expenses wherever you can. For example: take the time to shop around for better car insurance rates, bank accounts with lower fees, credit cards with better interest rates, cheaper phone/internet plans, and more. You can even commit yourself to changing your habits (i.e. ordering less take out and cooking more at home, making your own coffees “to go”, etc.). There are many opportunities to save money here and there, which can add up to a large amount of hard-earned money kept in your pocket over time.
If you have any questions about how to save more of your money, reach out to one of our advisors in Huntsville, Powassan, North Bay, Orillia or Parry Sound today.
Article written by Amy Cronkwright, Financial Advisor at Spire Advisors of Assante Capital Management Ltd.
Assante Capital Management Ltd. is a Member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada. This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please make sure to see a professional advisor for individual financial advice based on your personal circumstances.
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