If you are finding it hard to live within your income, the idea of saving some money might seem out of reach. But having some savings will help you build a sense of financial independence and peace of mind. Down the road, if you find yourself between jobs or facing a large unexpected expense or exciting career opportunity, you will have some money to draw on. If you do not have to spend your savings through your working years, you will be happy to have the extra dollars in your retirement.
Here are some key things you should know about saving:
- If you are new to savings, start by setting a short-term achievable goal: it can be as simple as creating a “rainy day fund” or saving for a family weekend outing.
- Plan to set some money aside for upcoming needs (such as household repairs) and annual expenses (such as income taxes).
- Be sure you have a plan to pay down any debt that you are carrying. It is important to pay off your debts as soon as possible, but you should also have some cash on hand in case of an emergency – for example, if you lose your job or have a family emergency.
- When you save, you can benefit from the power of compound interest through products such as investment funds. Learn more about RRSPs and other registered plans that are available to help your savings grow.
Even small amounts of money each month add up over time, and the more you save, the more you can build on your savings.
Consider talking to a financial advisor about where you can invest to see it grow more quickly.
If you do not have a financial advisor yet, learn about what to ask when looking for an advisor.
If you are getting started, learn more from the Canadian Bankers Association on how to open a bank account.