Be A More Effective Saver

            We have all heard someone talk about how they can't afford their dream car, house, or maybe how they are still struggling to pay for education. Today I hope to bring some insight as to how one can begin a path to where such things become more "reachable" goals rather than seeming impossible.

            Now in order to begin on this path, one needs an understanding of not only how to save more effectively, but what to specifically save for. Now almost all Canadians have money put away in some form or another, and each may have a reason for putting said money away in the first place. But what a lot of people don't realize is that they may be saving for all of the wrong reasons. Now we live in an age where saving money can be a difficult task, not because money is scarce, but because there is always some new fancy gadget being released to tempt our wallets. Although it's nice to have the latest whatchamacallit, there are better, and more important things to save for in the long term. Because within the next few years that gizmo you thought was so important to have will be in your closet collecting dust, so was it worth it? Would it not of been better to put money towards say: a house, new car, tuition, or even your own retirement. A disregard for such useless things, and an awareness of what will have impact on your life, is needed if one really wants to be a more effective saver.


          There are hundreds, thousands, of ways to save money, but you need to understand a bit of the math involved. The most common way to save cash is to put it into a savings account, and those accounts usually have interest. This basically means that the value of your savings will increase by a percentage over the years. More specifically they use compound interest meaning the bank uses the current value of your savings each time. the new value with interest will replace the previous value, and this is where you may hear the term "interest on interest". Before, I mentioned savings accounts, but there are actually far more types of accounts that can be used. These accounts include: RESP accounts, RRSP accounts, and TFSA accounts. Each of these accounts have different purposes and benefits whether that is saving for an education, or for retirement.

            When it comes to actually saving money, and putting it towards an investment like a house, I would suggest following these 4 rules:

1).Never spend money you don't            have
2).Save for large investments
3).Keep an emergency fund
4).Budget as often as you can

These simple rules can be applied to any situation, and they can be used separately or together. There are other options out there, but I find that these are the most useful. With these rules also comes a secondary rule, actually putting money away, I would at least put 10% of my paycheque, minimum, into my savings account, or put away a maximum of 50%. This depends on your current situation, it may be best to only put away 10% because you have other expenses, or, like me, you may still me young and can afford to put away a large portion away because you still live at home. But the best advice that I can give anyone is to start saving young, and put away as much money away as humanly possible before you have to start supporting yourself.

               Work hard, save smart, and when the time comes you will have the wisdom to understand how to make money work for you, instead of you working for the money. I hope that I have given you enough insight of being an effective saver that you may plan, and afford, any future investments.

Thank you.

Image links:
http://lewisaccountingandtaxservice.com/
http://www.3dtuning.com/pl-PL/tuning/chevrolet/bel.air/coupe.1957
http://www.surplusfurniture.com/blog/part-2-3-ways-to-save-money-at-surplus/