The Top 10 Ways to Save Money

Many of us use debt as the means to finance our lifestyle, and unless you win the lottery or inherit a windfall, you’ll be in debt for the rest of your life. Here are some pointers to start you on the path to financial health.


10. Make a budget and stick to it

When I started our family budget, I kept every single receipt for a month, which really helped me pin down where the cash went. If you’re starting from scratch, make a list of all your costs such as rent, mortgage, heat, hydro, utilities etc. Now add all those “little” extras such as lunches and coffee. If all this adds up to more than your income, take a good hard look at your needs versus your wants.


9. Pay cash for your wants AFTER you’ve paid for your needs

If you don’t have enough cash, save up until you do. When purchasing anything, ask yourself; do I NEED it or do I WANT it? Needs come first.


8. Pay your credit card balances every month

A credit card is very handy for things like hotel reservations and online purchases. Use a credit card with a loyalty or reward program, but don’t be fooled by thinking that you’re getting perks if you don’t pay your balance off every month. Interest rates on most credit cards are notoriously high. There are credit cards available with low interest rates, but these don’t normally offer a reward program. Choose one that’s right for your situation.


7. Cook at home whenever possible

By all means treat yourself to dinner out once every few weeks, provided you have the cash to pay for it (remember, need versus want?). In addition to saving money, the health benefits of cooking at home are an added bonus. Fast food is not only expensive but is, by and large, extremely unhealthy. By making your own meals, you control the amounts of sugar and fat that go into your food. While you’re cooking, make some extra for lunch the next day.


6. Brown bag your lunch to work

Leftovers from last night’s dinner make a nice change from a sandwich and a piece of fruit. You’ll be amazed at how much cash is left in your wallet at the end of the month, and chances are you’ll be healthier for it.


5. Find a bank that gives you the best bang for your buck

Bank service charges (now there’s an oxymoron!) vary greatly from one institution to another. Shop around to get the best deal for your situation. If you write few cheques and do most of your banking online, why pay a charge to have the cheques returned to you? Some banks offer accounts with no charges, provided you keep a minimum monthly balance, so it pays to shop around.


4. Use the public library instead of buying books

Your tax dollars paid for it, you may as well use it. Your local library can fulfill most, if not all, of your reading needs including magazines and newspapers. You may have to wait a month or two to read the current best seller, but so what?


3. Invest in your future

Invest in your future by investing in yourself. Contribute regularly to a retirement savings plan, like a 401k, that also allows you to defer income taxes until the money is withdrawn. Once you reach retirement age and start drawing on these funds, your income will likely be lower and therefore the funds will be taxed at a lower rate.


2. Save for the short term

Save for the short term by paying yourself first. Perhaps for a vacation (nice!), a mortgage prepayment (dull but worth it), or a new bicycle (exercise, fun AND environmentally sound!). A general rule of thumb is ten percent of your take home, or after tax, earnings. So, if you take home $2000 per month, put $200 into a savings plan. Sign up for automatic transfer and after a few months you won’t even miss

1. Don’t lie to yourself

Now this may not sound like a money saving tip, but think about it. If you’ve promised something to a friend, chances are you’re going to keep your word. Treat promises to yourself as you would a promise to your best friend. Promise yourself that you will, not just try, to behave yourself financially. You’ll thank yourself in ten years time.