Who doesn’t like to have a fat savings account? Everyone wants to avoid debt and build wealth. Maybe you want to save for a down payment for a new home or just want some money saved for a rainy day. The best way to strike this delicate balance is to plan your finances and save as much money as possible for the future. However, did you know that your financial habits have a big effect on how diligently you save money? Here are some Tips on Saving Money in Canada.
That’s why financial experts don’t have a standard answer to the question of how many savings accounts one should have. While some experts advocate for a single savings account, others prefer multiple accounts.
Check Your Saving Habits
Even before you review the many savings accounts in Canada at CompareMyRates.ca, you need to understand your saving habits. If you haven’t yet dedicated yourself to savings, you need to create room for it. List your income, fixed expenses and fluctuating expenses and then find ways of cutting spending.
There is a more reliable way of savings-automatic savings. You can liaise with your bank to have a section of your earnings sent directly to savings from the paycheck.
In case you have the habit of accessing your savings account regularly, you may need to open a more inaccessible account. Some popular options include a Money Market Account and Certificate of Deposit.
Are You Unable to Control Your Spending?
Most Canadians are unable to live within their means. How can you spend less? First, you must track down money wasters in your life. For instance, identify unnecessary movie channels, unused sports memberships and excessive cell phone minutes. Even the smallest changes to your spending can translate to reduced costs.
After adhering to these adjustments for several months, you can now review your spending habits in line with your financial goals. Put your goals into action and reduce your spending further.
Try To Delay Your Gratification
To create a saving habit, it is important to understand the concept of delayed gratification and how it relates to saving more. In the simplest definition, delaying gratification means deciding to limit your ability to enjoy something now so that you can get something better or bigger in future.
There is every reason to aspire to master the art of delayed gratification if you want to be a better saver. In the popular Stanford Marshmallow Experiment, Professor Walter Mischel proved that delayed gratification is an individual choice. This choice enhances an individual’s self-motivation, dependability and flexibility.
When it comes to savings, you can use delayed gratification to save now and buy stuff later. Ever heard of the “pay yourself first” strategy? This is one of the most popular ways of defeating your will power by using delayed gratification. This is how it works: simply dedicate a certain percentage of your paycheck to savings. The most important thing here is to take away the dedicated amount before you pay the bills, do your shopping and so on.
Where To Save
Probably there are people who still hide their savings under the mattress or in a safety deposit bank. This is not a smart way to store your hard-earned cash especially at this era of reliable savings accounts. As a Canadian, you can use various types of savings accounts including high interest savings accounts, Tax Free Savings Accounts (TFSAs), Registered Retirement Savings Plan (RRSP) and other investments. For a list of reliable savings accounts in Canada, visit CompareMyRates.ca.