Regardless of how much money you make, it can seem like there will never be enough to fund your retirement. Fortunately, saving money doesn’t have to be as stressful an endeavor as you may think. There are plenty of small steps you can implement that make a big difference in the long run.

 

Saving money in unexpected ways is about knowing how much money you have, and where exactly it is going. Check out the following helpful tips and tricks to not only help you keep track of your hard-earned money but also keep more of it in your pocket!

 

What you need to know

Below are seven steps that either save money, or will make saving easier – give them a try.

  1. Erase Consumer Debt: This type of debt includes credit card and line of credit debt. To help minimize your debt considering the following:
  • Stop using credit cards – move to debit cards as you will feel the pain of purchase
  • Make a reasonable plan to stop using credit and start paying off these debts
  • Always pay credit cards bills on time, even if partial payments
  • Shop around for or negotiate the best possible interest rates
  • Make biweekly credit card payments that are timed with your pay periods

 

  1. Pay Yourself First: Set up a direct deposit that automatically transfers a percentage of your income into a high interest savings account or RRSP every month or better yet, biweekly. This will not only help you be prepared for unexpected expenses but allows you to take advantage of the power of compound interest.

 

  1. Use a budget app: Entering every purchase into a smartphone app as you make it and then keeping track of how much you spend and where you spend it as it happens will help you be a more disciplined spender. Go to the app store on your phone, find a highly rated tracking app that you like and start using it immediately.

 

  1. Set a budget: Review the last 3-6 months of your credit card and bank statements. Identify and total all spending by category and/or location to determine unnecessary/discretionary spending. Determine what is necessary and can’t be substantially adjusted, including fixed expenses like your electrical bill, property taxes or mortgage. Most importantly, identify spending that can be adjusted, such as mid-week restaurant meals driven out of busy-ness, boredom or fatigue ($100 per week per family could fund RESPs instead). Think of the days that you started with $100 and ended with $0, but with nothing to show for it – this budgeting step is about.

As an extra disciplined step, withdraw monthly spending money and divide your monthly cash budget among separate envelopes dedicated to each expense. When the envelope is empty, your spending on that item is over for the month. If you have extra, put it toward paying off your debt.

 

  1. Delete your credit card information from online accounts: Doing this will add an additional hindrance to online shopping, as it forces you to stop, think and actively enter your credit card information each time you decide purchase something.

 

  1. Introduce a 30-day rule: If you feel like treating yourself to an unnecessary purchase, write the item down and wait 30 days. If at the end of that time you decide you still want it, then go for it. Even better, use that 30-day timeframe to save the money to make the purchase rather than charge it to your credit card. Record any spending impulses to see if there is a pattern or theme to them.

 

  1. Discover cheap or free methods of recreation: Inexpensive pursuits typically don’t have the same draw as pricey activities. That said, you can certainly find fun for less. Try visiting a museum during its free admission window, or enjoying a glass of wine with friends in the comfort of your home. By splurging sometimes and saving others, it is possible to both enrich your life and spare your budget.

 

The Bottom Line

Saving money is not only about creative cost cutting, but also about making smart spending decisions. It is never too late to take a look at your finances and start trimming away any excessive spending. You’d be surprised at the big differences small changes will have on your savings.