We are able to make ends meet without any real difficulty, but our problem is putting anything aside for a savings plan. Any helpful tricks up your sleeve?
The magic is to saving money is to trick yourself. You need to set up a regular program that takes the money out of your hands and puts it where you are less likely to touch it. There are a number of ways of doing this, all based on the same approach.
Does your employer have a payroll savings bond deduction plan? This is one of the simplest ways of building up a cash reserve. You determine how much you want to purchase in bonds, and a monthly deduction is made from your paycheque. Once the total is paid, you get the bonds. If you want, start small. This helps develop the saving habit without a big change in the amount of money you get each month. When you see the result, you will be encouraged to save more. A minor drawback is that you can only sign up for this type of plan at one time during this year.
Another version of the same idea is to have your bank or credit union make a transfer from your account. you can have the money directed to a savings account, R.R.S.P., or the purchase of savings bonds or guaranteed investment certificates. Talk to a service representative to find out how to set it up, how much you should transfer each month, and where to put the money.
To be a good money saving magician, you have to learn how to fool your wallet. This means making ” extra” money disappear, and then re-appear in a safe place ( and I don’t mean spending it). Confused? It’s simple. Let’s say you finish making your payments on a loan. You are already used to not having the money, so keep making the same monthly payment. The difference is, now you are saving that money! Again, your bank will be happy to help set up a transfer and saving plan.
Other sources of extra money? How about your raise? Set aside the increase in your paycheque. Do you get a tax refund or GST rebates? Put those aside also. Live on what you make regularly, and put away all irregular receipts.
The whole point is “what you do not have in your hands, you will not spend.” If you are already living within your means, you have a great start. If you are not, your first task is to look at how to live with what you get, and then develop the habit of saving “found” money. A little practice and, instead of rabbits, you can pull cash out of your hat.
Writer is BIA Registered Credit Counselor at New Life Debt Solutions and can be reached at (604) 909-2277.