Of Course You Can Save! Savings. When you hear that word, do you feel a clutching sense of guilt and inadequacy? If you’re 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 insufficient. That’s shocking to hear, but not as remarkable as York’s 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 you’ve been spending money on. Just don’t. Spend, that is. Sure you want it, but that’s 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? That’s called saving. You don’t end up with stuff; you end up with MONEY. Here are a few other tips for the brainwashing you’re 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. That’s 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." You’ll find a gazillion websites devoted to living on less. Cry poverty with style. Learn handy phrases like, "Let’s eat somewhere cheap." And "Shopping? Blech. Let’s go for a bike ride." It’s less embarrassing than you’d think, because more people are in your shoes than you realize. They’ll be grateful you spoke up. Step 2: Now save it! There are a thousand ways to live on less, but you don’t 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. Don’t even think about it. Direct deposit is a saver’s best friend because the money is whisked away into your RRSP or Mutual Fund account and you don’t have to do a thing. Drop by your payroll department and/or your bank and fill out the forms. Do it today. Go “veggie”. 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 ‘em! Play money games. Whenever you get a $5 bill, put it aside. Do it with loonies, with quarters, or all your spare change. You’ll 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. You’d be amazed at who will drop their prices, fees and interest rates: airlines, hotels, credit card companies, computer/appliance/rug salespeople… 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 won’t 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, let’s look at the private mortgage insurance (PMI) you’ve been paying because you didn’t have enough money to make a 20% down payment. You’re 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 Victoria’s Secret (sorry, guys). Don’t 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 don’t get charged every time you use your debit card. Don’t 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 wasn’t me – OK, it was). Avoid NSF charges by ensuring you have sufficient funds available when you write a cheque. Clean it yourself. I’ve 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 sponge. Never pay a pro if you don’t have to. If you can fix the neighbor’s 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 previous salary. 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 aren’t always necessary. No pet pampering. Does your dog need those pricey snacks? Does your cat need acupuncture? I didn’t think so. Never pay full price: If you must shop, for heaven’s sake, discover the online world of discount Web sites. You can find excellent sources of "lightly used" goods – 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) you’ll 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.   Back to Financial Index Back to SCSC Index We reserve the right to list or refuse any submission. Our opinion is the only deciding factor and is final.

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