When it comes to money, would you consider yourself to be a spender or a saver? Do you feel that you save enough money month over month for things like emergencies, retirement, and future goals? Despite our best intentions, it can feel like an uphill battle to reach our savings goals. Life is expensive, and it seems like every month something else comes up that gets in the way of socking away extra cash.
With that in mind, today’s post will share 5 easy – yes, easy! – ways to accelerate your savings. These are steps you can take starting today to reap massive financial rewards over time. So grab that pen and paper and let’s jump into it!
Pay yourself first.
As I mention in my blog post about how to budget, the concept of paying yourself first is one of the greatest financial lessons I’ve learned. It involves putting aside a set percentage or amount of money every paycheque so that our savings goals can be met without scrambling at month end. If you haven’t read it yet, check out The Wealthy Barber by David Chilton – it goes into this concept in far more detail and shares advice on deciding how much to invest, how to invest it, and more.
To make things easier, set up automatic transfers from your chequing account to your savings account(s)/investments to occur on paydays. Out of sight, out of mind! For more details on how to do this, check out this blog post about automating your savings.
Take advantage of corporate investment vehicles.
Many companies offer group RRSP and other savings programs that automatically deduct a set percentage of your salary on each pay and put it towards a long term savings plan. Like paying yourself first or saving on autopilot, this pretty much guarantees that you’ll be saving those funds every paycheque.
If your company has a matching program, even better! Try to max out your contributions here as the matched amount is essentially “free money”.
Reinvest your cash rewards.
If you have a cash-back credit card, transfer your rewards to your savings account. The same can be done with bonuses or raises which can add up even faster. Receive dividends on stocks? Reinvest them too.
Examine (and lower!) your fixed expenses.
Take a hard look at your ongoing expenses and try to find opportunities to cut back.
Membership fees can add up, and many of these can actually be shared with others to lower the price you pay. My blog post on memberships you can share to save money has tips on which ones to look into and how to split the cost.
Cable, Internet, and Phone
There are many ways to lower these bills, and I share my best tips in my post about how to save money on cable, internet, and phone. Things like switching from cable to Netflix, opting for a smaller plan, and eliminating your landline are some of the first steps you can take.
After making these changes, increase your monthly savings contributions by the same amount as you’ve lowered your expenses. Your budget won’t feel it, but your savings account will!
Adopt a one-in, one-out policy for discretionary items.
If you want that new dress, are you prepared to part with an old one? Try to only buy things you really need. This exercise will save you money and keep your closet from overflowing. You can use apps like TrendTrunk to sell your unwanted clothes to earn back some cash. (Read my full post on how to earn money by cleaning out your closet here.)
Leave me a comment on how you’ve accelerated your savings! What strategies have you found to be the most successful?
(And be sure to check out this great hack for saving money on e-Transfer fees!)