Saving is important. Saving for your future is definitely important. Saving up till you have the money to buy something specific is also highly important. Some of you haven’t ever saved anything, and you need to start now. The best way to be disciplined about it is to make your savings automatic. Almost every banking institution (except Vancity – don’t bank with them) has the ability for you to make payments online, and transfer money from one institution to another with relative ease. These days you can even email money to one another, and you can even take pictures to deposit a cheque with Tangerine. Wow – that’s progressive banking!
MY FAVORITE BANKING INSTITUTION
I am going to let you know of an amazing institution that I deal with – Coast Capital Savings. They are amazing! They also have a free chequing account, and guess what, it really is FREE! There are so many benefits that it will make your head spin! If you are with a different financial institution (any big bank, BMO, RBC, CIBC, BNS) you should take a look at Coast Capital and see how much money you will save in one year from bank fees. Seriously! There is no reason to be throwing away money that you could keep for yourself and save. Go to Coast Capital Savings and check them out right now. You’ll be glad you did! They also offer promotions if you switch to them, so look and see what they offer. It could be cold hard cash, or a new tv – definitely worth checking out!
ALWAYS SAVE FOR MAJOR PURCHASES
Okay – back to savings. My hubby and I made a promise to each other that we wouldn’t buy any major purchases without saving for it first. We refuse to get into debt just because we want something at the time. We have set several savings goals over the years for things we want, and it has worked amazingly well. We know it’s easy to just use our bank cards and spend, so we came up with a different idea to save without touching it.
We both opened an account with Tangerine (formerly known as ING Direct). It is an online bank only. There are no branches or bank cards to be had, it is all done online.
This makes it easy to leave your money alone, and let it grow! The website has fantastic goal calculators, and I used them extensively to help plan my financial goals. The best way to learn about something is to hear examples, so I’m going to share with you some of my savings goals, and how it worked.
SAMPLES OF SAVINGS GOALS
1. Motorcycle (that became a trip to Israel, Egypt, and Jordon)
When out travelling with my hubby one day, he drooled over a Honda Shadow that was parked beside us at a red light. He talked non-stop about it for the next few blocks, and that’s when I had an “aha” moment go off in my head. My hubby was currently 45 years old, and I decided that I would save up and buy him a motorcycle for his 50th birthday as a surprise. I went motorcycle shopping, and figured out that to buy him a new bike I would need $15K at least. I then got online with Tangerine, and set up a savings goal. It allowed me to enter the amount I needed, and the time I wanted it. In this case, it was 5 years that I had to save. Once I entered in the amounts I wanted, the computer spit out the amount of money I needed to set aside in order to have my goal of $15K in five years. It wasn’t that much – so I divided the amount in half, and then had it come out of my regular bank account (you can link your accounts with Tangerine) twice a month.
VACATION SAVINGS GOAL
Fast forward five years. We had gone on several hot vacations to Mexico and Cuba, and my hubby told me he didn’t want to go anywhere else until he visited Israel. I decided to check out prices, and found out that I had enough saved to take him on a surprise trip, not only to Israel, but to Egypt and Jordan as well, and I decided to give him the trip instead of the motorcycle. I can’t begin to tell you how wonderful it was to have the money! It took five years worth of saving, and I never missed those small amounts leaving my bank account. Side note, I did end up buying the motorcycle for his birthday too – but I ended up cashing out RRSP’s in order to do it. I don’t care – it was worth it, and my hubby rides his motorcycle all the time, so I don’t regret it! You only turn 50 once!
JEWELRY SAVINGS GOAL
2. Diamond Ring
When my hubby and I got married, I told him that I had always wanted a huge honking solitaire, and that could I please have one when we reached our ten year anniversary! He said sure, as long as he got a sword! (He’s British…ha ha) We agreed, and so we did the same process as before. Got online with Tangerine, figured out that we wanted $10K for my ring, and $5K for his sword. We crunched numbers, and it spit out what I needed to save per month in order to have $10K in 10 years. What a small number! I again set it up automatically to come out of my accounts bi-weekly (twice per month). Guess what! When our ten year anniversary came around, we had the money, and went shopping. I ended up with a beautiful flower diamond ring instead (I couldn’t find any solitaires that I liked) and so picked the one I did like. Best thing? It only cost just over $5k, which left the other $5K to use on whatever else we wanted! Everyone loved my ring, and gasped when I told them how much it cost. But I also made sure that they knew we had SAVED for TEN LONG YEARS for that ring! We couldn’t have come up with that amount of money when our anniversary came along – no way! Who has an extra $5k sitting around to make a purchase like that? Not us! So see? If you want something – start saving now!
PLANNING FOR TRIPS
Every year I got a cheque from my work for matching RRSP. It came every year in January, so we decided that we would use that money for a hot vacation every year. We also decided to set money aside monthly, to use as spending money. For quite a few years, we went on trips to Mexico, and Cuba, until I changed jobs and didn’t have the matching RRSP cheque anymore – too bad! When we went on our trips, I would wait until about a month before our planned date, and would go online and find a last minute booking. One of our first trips to Mexico only cost us $659 per person. That included airfare, food, and hotel. How cheap is that! Our trips to Cuba? $579. The person in the room next to us had booked six months in advance, and it cost her $1575 per person. WHOA!! See? Save your money and book last minute.
Every trip we went on, we also took out the money we had set aside for our spending money, and once it was gone, we didn’t do anything else. Our plan was: beach day, excursion day, beach day, excursion day, beach day, …..you get the drift. If by the middle of the week the money was gone – no more souvenirs or excursions! Guess what – we never ran out of money, or overspent. Once we were home, no bills, because the trip had already been paid for.
HOW TO SAVE FOR A VACATION
So – if you want to go on a trip, you need to do a couple of things first:
1 – Figure out WHERE you want to go, and find out the average price
2 – Figure out WHEN you want to go (a year away? 6 months? 2 years?)
3 – Start setting aside spending money as well
4 – Go online to a financial calculator, and see how long it will take you to save the money for the vacation, if you don’t have it. Make sure you add for inflation, if the trip is a few years away. The amount of money you need to set aside will vary on how long you have to save.
SAVING FOR FUTURE TRIPS
My hubby and I have also been saving for the last fourteen years, for a trip when we reach our 20th wedding anniversary. Because the number is so small, it’s easy for us to not miss that money. Yet, when we finally reach our 20th, (in 6 more years) we will have an amazing amount of money set aside for our vacation, and we will enjoy it, because it will be PAID for! Woohoo!
ENCOURAGE YOUR KIDS TO START SAVING FOR A GOAL
My advice for you would be also to encourage your children to start saving. They may not have a steady job, but anything earned from babysitting, or housesitting/pet sitting, or birthday money can be saved as well. Once my son got a job, I encouraged him to also open an account with Tangerine, to start saving for a car, and for a ring (for a future fiancée). This is in addition to his regular accounts at Coast Capital. When the money is at Tangerine and is online only, it’s easier to resist taking money from the account. It takes two days to transfer it back to your institution, so that’s a bit of a deterrent from spending it right away on something.
START SAVING NOW FOR A FUTURE FIANCE/WEDDING
I also had savings goals for leather couches, new bedroom furniture, and a king sized mattress. We bought all of those things once we had accumulated the money. Right now, I have a gazebo fund, and one of these days, I’m going to have a beautiful gazebo built in my back yard. I can hardly wait!
I remember when my stepson was dating, and he reached a point where he knew he wanted to marry his girlfriend. He didn’t propose when he wanted to, because he didn’t have a ring, and didn’t have any money saved up for it. A light bulb went off in my head, and I thought to myself, “that’s something every guy needs to start saving for as soon as he can!” You can make it a small amount, $30 bi-weekly, or even $50 bi-weekly, or if you make a lot of money and don’t care, make it $100 bi-weekly. That money will go into your high interest savings account, and sit there, and one day when you need the money for that ring, voila, it will be there. Seriously. I would encourage all parents of males out there to get your kid to start saving for a ring once they have a job! And for the females? Start saving for your wedding dress! They are EXPENSIVE!
GET SATISFACTION FOR YOUR PURCHASE AFTER SAVING
There is nothing so satisfying as saving up for something, and then buying it, or going on vacation and it’s paid for. Ahhh. You can do it! You can start setting money aside NOW and before you know it, the time will have past and you will have a huge amount growing without you even noticing it. The only thing you will notice is the small $ amount leaving your bank account each month. I would suggest having it set up bi-weekly, so it’s a smaller amount, rather than coming out on the beginning of the month, or end of the month. Or whatever works best for you. Just because I do it that way doesn’t mean it’s the best way for you. You know your paydays, make it work for you!
WRITE OUT YOUR WISH LIST
Start right now making a list of things you’ve always wanted. Go ahead – right it down! If it’s a diamond ring, write it down! If it’s a swimming pool, write it down. If it’s a new vehicle, write it down. Nothing is too outrageous.
If you can only save $100 per month, you can also put that into a savings calculator, and it will then tell you how long it will take you to reach your goal to buy whatever it is you are saving for.
If I can only save $50 per month for my gazebo, and it’s going to cost $5575, it will take me eight years. Now, that is a long time. If you can’t save any more, then realistically, that’s how long it’s going to take before you can buy a gazebo. However, if you are able to save $150 per month ($75 per paycheque) it will only take three years. Of course as you increase the amount, you lessen the amount of time it will take. Do what you can!
Start long term planning. Do you have a special place you want to visit when you turn 40? 50? Any decade birthday? Your 25, 30, or higher wedding anniversary? Start saving now, because the money will be there when you need it.
SAVE FOR RETIREMENT – RRSP’S
You should also be saving for your RRSP’s. If you don’t currently save for your retirement, go to your bank and set up an appointment to get some, and start saving immediately. This can also be automatic, and come out of your account on a monthly basis. No-one else is going to save for you future, it has to be you. Don’t wait until you are old to start saving, put your money to work NOW.
SAVE FOR EMERGENCIES
And lastly – the most important thing – save for emergencies, because you’re always going to have one. Whether it’s your roof leaking, or a vet bill, or a new computer, or something for your kids, something is going to come up. You MUST set money aside, so that your credit cards don’t start piling up with bills that came because of an emergency. Appliances break down, so do vehicles. You need to make sure you have money set aside for when it happens, and NEVER touch that money for anything else. You need to be disciplined about it. If you can’t stop touching emergency money – put it in a separate account.
EVERYONE CAN SAVE
Everyone can learn to save. Even if you haven’t been a very good saver up to this point, start today. Who cares what you did yesterday. Today is today. It’s never too late, unless you are dead, and you’re not, you’re reading this post.
Step away from your computer, and go put a savings goal and plan into action – I dare you! And then let me know how it goes.