Credit Counseling with
the Sudbury Community Service Centre
Of Course You Can Save!
When you hear that word, do you feel a clutching sense of guilt and
inadequacy? If youíre like most Canadians, you must. According to a
recent study conducted by York University, more than 75% of respondents
said they knew that their savings, specifically for retirement, were
Thatís shocking to hear, but not as remarkable as Yorkís discovery
that how much you save has very little to do with how rich you are. York
divided the 7,700 households they studied into 10 income groups. The top
10% of the lowest income group had saved more than $150,000 per
household. Meanwhile, middle-income folks, on average, had only $45,000
in assets. What York found to be the most significant savings factor was
no more jaw-dropping than this: You just have to save it.
But how, you ask? How can you save a red cent when you just barely
live on what you earn? Well, since you asked: Saving is a two-step
process. First you retrain your brain, and then you find all kinds of
clever ways to live on less money.
Step 1: Retrain your brain.
Saving money is a state of mind. Before you can start, you have to
renounce the spending and stop believing you actually need all the stuff
youíve been spending money on. Just donít. Spend, that is. Sure you want
it, but thatís no excuse for buying it. The next time you want to buy
something, take the $50 or $100 out of your wallet, and stash it
somewhere. See? Thatís called saving. You donít end up with stuff; you
end up with MONEY.
Here are a few other tips for the brainwashing youíre about to do:
Accept frugality as your savior. Become a closet cheapskate and
emulate your frugal friends. Note that they fix the shower curtain
instead of buying a new one. Sit down with Depression-era relatives and
ask about economizing. Thatís what I did. And, yea, did the spirit of
saving take hold of me!
Seek out some inspiration. Get thee onto the internet and type in
"living cheaply," "frugal living" and "voluntary simplicity." Youíll
find a gazillion websites devoted to living on less.
Cry poverty with style. Learn handy phrases like, "Letís eat
somewhere cheap." And "Shopping? Blech. Letís go for a bike ride." Itís
less embarrassing than youíd think, because more people are in your
shoes than you realize. Theyíll be grateful you spoke up.
Step 2: Now save it!
There are a thousand ways to live on less, but you donít want to
make your life a misery. Here are some of the most painless ways you can
economize, without losing out on quality of life.
Donít even think about it. Direct deposit is a saverís best friend
because the money is whisked away into your RRSP or Mutual Fund account
and you donít have to do a thing. Drop by your payroll department and/or
your bank and fill out the forms. Do it today.
Go ďveggieĒ. If you can do three meatless days a week (without
substituting pricey fish), you could save $25 a week, which equals $100
a month, which equals $1,200 a year! Beans, ya gotta love Ďem!
Play money games. Whenever you get a $5 bill, put it aside. Do it
with loonies, with quarters, or all your spare change. Youíll have a
nest egg before you miss a nickel.
Never spend a windfall. Take your income-tax refund, that holiday
money from your folks, the $16.35 overpayment check from the telephone
company and any other extras and save them.
Haggle. Youíd be amazed at who will drop their prices, fees and
interest rates: airlines, hotels, credit card companies,
computer/appliance/rug salespeopleÖ the list is endless.
Re-evaluate. Re-evaluate. Re-evaluate. That dinner out cost more
than you spend on groceries in a week. That pair of shoes is worth half
a monthly bus pass. Learn what your money is worth, and you wonít be so
quick to dispose of it.
Don't overpay your taxes. Sure you love to get a fat refund from the
CCRA (Canada Customs and Revenue Agency) every spring. The fact is,
however, you're effectively lending money to the government
interest-free. Go through your tax return and see if you can plan your
withholding so you make it to December 31 getting a small refund. This
way, you can use your money NOW (and bank the refund when you get it).
Raise your insurance deductibles. Reassess the deductibles for
various kinds of insurance. If you can raise them, your premiums drop.
Get your mortgage costs down. First, look at whether your interest
rate is too high. If it is, look at refinancing. Next, letís look at the
private mortgage insurance (PMI) youíve been paying because you didnít
have enough money to make a 20% down payment. Youíre protecting the
lender, not you. If the equity in your home is greater than 22%, demand
that your lender cancel it. Lastly, pay ahead on your mortgage. If you
can swing an extra $100 per month, you will save thousands in interest
costs over the long haul.
Toss the catalogs. This is the most insidious form of spending
temptation known to man or woman. Chuck them straight in the trash. Yes,
include Victoriaís Secret (sorry, guys).
Donít pay unnecessary fees. You pay $1.50 just because the ATM is
right there, right now as opposed to walking two blocks to your bank,
where you donít get charged every time you use your debit card. Donít
pay late fees, return the videos on time. I know a guy who paid $60 in
late fees to a video store last year (it wasnít me Ė OK, it was). Avoid
NSF charges by ensuring you have sufficient funds available when you
write a cheque.
Clean it yourself. Iíve discovered a nifty trick: When a clothing
label says, "Dry Clean Only," I wash it. Alternatively, dab out that
little coffee stain with an old-fashioned cleaning device known as a
Never pay a pro if you donít have to. If you can fix the neighborís
car and he can paint the bathroom, why not do it?
Bank your raise. You may find that measly 3% to 5% boost in your
paycheck irritatingly tiny. Add that to your savings and live on your
Pay less for long-distance. Evaluate your phone bill and see how
much you're paying per minute. Some dial-around codes or cheap calling
cards (one without a surcharge per call) may give you a better rate. Not
only do you save, but you may also find nightly calls to Aunt May arenít
No pet pampering. Does your dog need those pricey snacks? Does your
cat need acupuncture? I didnít think so.
Never pay full price: If you must shop, for heavenís sake, discover
the online world of discount Web sites. You can find excellent sources
of "lightly used" goods Ė everything from books to jewelry to office
furniture to the entire first season of Star Trek on video.
I could go on an on, but you get the picture. If you follow even a
few of these tips (as I have) youíll end up with a substantial chunk of
extra cash every month. Stay in the savings state of mind.
For more information contact the Sudbury Community Service Centre at
(705) 560-0430 or 1-800-685-1521.