{"id":366,"date":"2021-06-29T20:53:57","date_gmt":"2021-06-29T20:53:57","guid":{"rendered":"https:\/\/www.nerdwallet.com\/ca\/?page_id=366"},"modified":"2024-05-02T15:14:54","modified_gmt":"2024-05-02T22:14:54","slug":"how-to-save-money","status":"publish","type":"page","link":"https:\/\/www.nerdwallet.com\/ca\/personal-finance\/how-to-save-money","title":{"rendered":"How to Save Money in 8 Easy Steps"},"content":{"rendered":"\n

1. Create a budget<\/h2>\n\n\n\n

The first thing you need to do is figure out how much money you\u2019re working with: what you\u2019re spending, where it\u2019s going and how much you\u2019re actually making. In other words, you need to make a budget<\/a>. Find out how much money you take home after taxes. Then, tally up all your monthly expenses (utility bills, rent\/mortgage, transit costs, subscriptions and more) so you know how much you\u2019re spending every month. Remember to include any debt payments, like student loans or credit card debt.<\/p>\n\n\n\n

2. Figure out how to reduce your spending<\/h2>\n\n\n\n

Once you know where your money is going, you can figure out how to lower those costs and improve your cash flow<\/a>. Could you get takeout once a week, instead of two or three times? Do you really need Netflix, Amazon Prime, Apple TV, and Disney+, or could you make do with one or two? You don\u2019t have to cut out all your fun and entertainment, but think about where you might be able to save.<\/p>\n\n\n\n

It\u2019s also worth taking a hard look at your bigger expenses like rent and car payments. Could you get a roommate, move to a smaller place, or sell your car and take transit?<\/p>\n\n\n\n

\u00bb MORE:<\/strong> Should you pay bills with your credit card? <\/a><\/p>\n\n\n\n

3. Automate your savings<\/h2>\n\n\n\n

Once you have your budget figured out and know how much you can afford to save every month, automate those savings. Set up automatic transfers once or twice a month \u2014 or every time you get paid \u2014 from your chequing account to a savings account<\/a>. Automating this step means you can save without any extra effort. Plus, moving the money before you see it in your chequing account<\/a> can help reduce the temptation to spend.<\/p>\n\n\n\n

Creating an emergency fund<\/a> as a safety net should be your number-one priority when it comes to saving money. Ideally, you\u2019ll want at least three months\u2019 worth of income as a safety net in case you lose your job or have another kind of worst-case scenario. Automating can make it easier to set this money aside.<\/p>\n\n\n\n

4. Save smarter<\/h2>\n\n\n\n

Setting your money aside in a savings account is smart, but making your money work for you is even smarter. Consider a high-interest savings account for short-term savings goals, which allows you to earn a little bit of interest with no risk. The rate won\u2019t be super high, but you can occasionally find slightly higher promotional rates.<\/p>\n\n\n\n

Another option for short-term goals is a guaranteed investment certificate (GIC)<\/a>, which holds your money for a predetermined amount of time. GICs are a good option if you\u2019re saving for a specific goal (like a car or a dream vacation) and want to avoid dipping into your savings. A GIC locks up your money for a specific amount of time (usually 6 months to 5 years), and you\u2019ll be penalized if you take it out early.<\/p>\n\n\n\n

For longer-term goals like retirement or your children\u2019s post-secondary education, look into opening a Registered Retirement Savings Plan (RRSP)<\/a>, Registered Education Savings Plan (RESP)<\/a>\u00a0and a Tax-Free Savings Account (TFSA)<\/a>. These plans come with tax advantages and extra benefits, and you can invest your money for faster growth.<\/p>\n\n\n

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\n\t\t\t\t\t\"Ad\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\n\t\t
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Read up about ways to save money on Reddit.<\/h3>\n\t\t\t\t\t\t\t

\n\t\t\t\t\tSee what Canadian Redditors are saying about how to save more money each month.\t\t\t\t<\/p>\n\t\t\t\t\t<\/div>\n\n\t\t

Visit Reddit<\/a><\/div>\t<\/div>\n<\/div>\n\n\n\n

5. Tackle your debt<\/h2>\n\n\n\n

Once you\u2019ve built up your emergency fund, it\u2019s a good idea to start prioritizing your debts. Paying off your debt<\/a> as quickly as possible helps you save money on interest and dedicate those monthly payments to a different financial goal. Two common debt-payoff strategies are:<\/p>\n\n\n\n