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How to get your savings on track

December 08, 2020

Money Sense

Meridian

A mum and her kids dancing in the living room

It can be easy to feel worried and stressed about saving - especially if you didn’t start until later in life. But, no matter what anyone tells you, it’s never too late to begin saving.

Don’t be paralyzed by regrets or what-ifs. Here’s how to get started in four simple steps.

 

1. Know how much you’re spending

To start saving, you need to figure out exactly how much you’re spending, and on what. Make a list of all your expenses, including:

  • Rent or mortgage payments

  • Utility bills, like water, electricity, and heating

  • Groceries

  • Gas and/or public transportation

  • Credit card bills and other debt payments

  • Child care costs

  • Communication (phone, internet, cable, etc.)

  • Entertainment (streaming subscriptions, ordering takeout, books, etc.)

Once you know where your money is going, it’s easier to make a budget and decide how to cut back.

 

2. Connect with an advisor

An advisor’s expertise is priceless (well, at Meridian it’s free). Talking to an advisor about your priorities, dreams, and future hopes, helps them build a plan that goes beyond your budget and finances. Together, you can map out how you’re going to save and stay on track so that you get everything you want.

Talk to an advisor

 

3. Choose investments that fit your plan

Discuss investment options with your advisor. Some investments can seem risky and intimidating, but an expert can lay out all your options and recommend the path that’s right for you. It’s all about identifying your risk tolerance and resilience to volatility.

 

4. Make saving automatic

Once you’ve got your budget and you’ve decided on the right investment plan, figure out how much you can afford to put aside each month to grow your savings. Then, set up pre-authorized contributions. That way, a set amount of money is automatically transferred to your savings on a weekly, bi-weekly, or monthly basis.

This way, you save without thinking about it and benefit from compound interest.

Here’s an example of how much your savings could grow with automatic contributions over 20 years. Age: 45 Savings: $0 Automatic RRSP monthly contribution: $1000 Rate of return: 5%25 Investing $1,500 annual tax refund in TFSA. At age 65, your total savings will equal $254,472.

 

Learn more about saving money

How to make a budget
What is a pre-authorized contribution plan?
Saving at every stage of life