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Saving 101 - A Canadian Money Saver Guide for Beginners

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Registered Retirement Saving Plans (RRSP) - A tax deductible and tax-sheltered account that encourages people to save for their retirement and can be used for investments and savings.
Registered Education Savings Plan (RESP) - A tax-sheltered account that incentivizes parents or guardians to save for a child’s education.
Windfall money - Money that is not a part of one’s typical monthly budget and income. Typically includes gifts, bonuses, share redemptions, tax returns etc.
Fixed expenses: Expenses that are generally the same every month. They can be essential or non-essential expenses (eg. water bill or Netflix subscription).
Variable expenses: Expenses that fluctuate month-to-month depending on decisions or circumstances,, there is more discretion and flexibility on these expenses on a monthly basis. (eg. groceries, gas, entertainment)

It Starts With Budgeting:

  • Write down income and expenses: A first step to take for financial awareness.
  • Understand fixed versus variable expenses: Fixed expenses help with predictability in the budget. Tracking variable expenses helps improve your discretion in spending.
  • Divide expense items into wants and needs: Here you can put things in percentages and see if it makes sense.
  • Find out what can be automated for both bills and savings: They key here is that it eliminates some of the decision making and ‘forces’ you to save.
  • Make savings a ‘mandatory’ bill to yourself: This helps with getting into a mindset of savings more than anything else.

Essential saving concepts:

  • Always have a goal (long-term focus).
  • Always have a budget (short-term focus).
  • Make emergency savings a priority.
  • Be Intentional.
  • Be Flexible.
  • It’s all about habits.
  • Don’t just save, invest!
  • Try to enjoy life.

Always have a budget:

  • Cash management in short-term (eg. monthly) is key.

  •  Reaching long-term savings goals consists of small wins (savings) every month.

  •  A few tactics to help save within a monthly budget:

                 - Delay discretionary spending to later in the month.
                 - Save as soon as you get your pay cheque.

                 - Reward yourself if you have extra room in your budget
                   at the end of the month.

Make emergency savings a priority:

  • Unforeseen events cannot be anticipated but should be expected.

  • Should be the first savings goal for most.

  • Suggested amount: 6-12 months worth of living expenses.

  • Eg. Monthly living expenses: $3000 → $3000 x 6 = $18,000 as a minimum savings goal for emergency fund.

  • Allows one to save for other goals (eg. down payment on a home, vacation, etc) with more confidence.


Be Intentional:

  • Budgeting is not just about tracking expenses.

  • Need to have the will to stay within the budget and be consistent and disciplined.
  • Having a specific savings target in mind helps with being intentional.

Be Flexible:

  • What you save for and how much you save can change with life circumstances.

  • Important when budgeting within a multiple person household where there are different views on priorities.

  • If your approach to saving is not working over several month, maybe change approach and/or expectations.

  • Your priorities for what you are saving for might change, and that’s okay. For example, you may have to put off a vacation by one year to do some home renovations.

All about habits:

  • Habits take time to build, old ones die hard.

  • Need patience and time to build better savings habits (with yourself and household members).

  • Needs consistency until saving/spending habits become second nature.

  • Sometimes small tweaks in everyday life can go a long way. For example, automating bills and savings, meal prep and eating out less frequently.


Don’t just save, invest:

  • Investing and saving are the same thing if your time horizon is long enough.

  • Compound returns over time from investing make withholding spending in the present much more rewarding.

  • Saving for long-term goals without investing runs risk of savings losing purchasing power to inflation (~2-3% annually). Eg. Saving $300/month for 10 years = $36,000 in savings. Same amount invested at 8% annual return = ~$55,000


Enjoy life:

  • Saving can be stressful and one may feel like they are sacrificing too much.
  • Important to not lose sight of well-being and things we value most (family, friends etc).
  • Find balance between sacrificing some things you can truly live without while being okay with spending on leisurely activities in moderation.
  • Appreciating what you have also makes ‘sacrificing’ some things to save money a lot easier.
Account Types:
Here are some different account types and products one can use to save money:
Chequing accounts:

  • Generally meant to be a ‘spending account’ where you do most of your transactions.
  • Generally not ideal for saving money. Most carry a recurring monthly fee.
Savings accounts:
  • Can be low or high interest accounts.
  • Generally no recurring monthly fees, but may have fees for withdrawals or one free transaction per month.
Guaranteed Investment Certificates (GICs):
  • Deposited money is locked in for a fixed period of time.
  • Penalties if funds are withdrawn.
  • Pay higher interest than most savings accounts.
  • Longer terms generally may higher rates.
  • Great for short time horizons (i.e. less than 5 years) and making sure you do not spend savings.
Market-Linked Guaranteed Investment Certificates (MLGICs):
  • No guaranteed rate but offers higher return potential through the equity markets.
  • Returns tend to be capped but bank guarantees you will not lose any of your initial capital.
  • Terms are typically 3-5 years.
Fixed Income exchange-traded funds (ETFs):
  • Initial capital is not guaranteed like savings or GICs.
  • Potential for higher returns and safer than investing in equities.
  • Good for short-term time horizon (i.e. up to 3-5 years).
Savings Tips:
  • Watch for non-essentials in grocery cart.
  • Meal prepping can save you from eating out due to ‘being lazy’ in the moment.
  • Communicate with significant other.
  • Hold each other accountable and check in periodically on progress (eg. monthly).
  • Learn to say “No”. No need to go to every event or activity you are invited to, especially if you don’t feel like it!
  • Use separate accounts for different savings goals. Helps with staying organized and tracking progress.
  • Use “windfall money” to give your savings a boost instead of spending it.
  • Use bonuses and gift money as a way to get savings goals faster.
  • Upgrade your monthly savings target when you get a raise.
  •  Contribute to RRSP when you reach a higher tax bracket.
  • Bonus tip: save your tax refund!
  • Take advantage of employer retirement savings programs and share plans.
  • Employers often have very attractive plans that match contributions. 
  • Easy deduction from pay cheque that is barely noticeable.
  • Take advantage of 20% (or more) government grants for RESP for children’s education. Where else can you guarantee a 20% return?
  • Invest funds within RESP to further boost returns.
  • Need a break? Try a ‘staycation’. No need to worry about expensive flights to far distances.
 Budgeting Tips:
  • List expenses and income.
  • Track variable expenses and note monthly budget progress.
  • Fixed expenses are known and are predictable.
  • Automate bills and savings.
  • Take the decision making and spending impulses out of the picture.
  • Make savings a ‘bill’ you have to pay to yourself.
  • Save water and electricity. Saves you money and the environment. Turn off the lights before you go to sleep!
  • Continuously ask yourself if something is a want or a need.
  • How much do you spend on wants vs needs. Put it into percentages.
  • Negotiate monthly bills (eg. phone plan, insurance etc).
  • Even $100 saved every month = $1200 per year.
  •  Reward yourself; Buy something or enjoy an experience you like if you have a surplus in your budget to help self-reinforce good habits.
  • Cut the cord; Eg. With streaming options like Netflix and high internet speeds, TV and cable plans are becoming less needed.
  • Remove unused subscriptions; If you don’t watch Netflix, considering pausing your subscription!
  • Consider using a prepaid card instead of credit cards; This forces you to only use money that you have.
  • Don’t compare yourself with others; It’s never a fair comparison. Focus on improving your situation at your own pace.

Monthly Budgeting Template

Monthly Budgeting Template


    Mar 5, 2024
    Thank you. This is a good starting point and refresher. The basics should be taught in all schools.


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