When it comes to saving money, it can sometimes feel like you have to give something up in order to make any progress—but it’s hard to maintain motivation if you feel like you’re constantly depriving yourself. Luckily, “there are ways to save without feeling the pinch,” says Michelle Dagnino, Executive Director of the Jane/Finch Community & Family Centre, a United Way–supported agency. She works with families, many of whom are living on a low income, to help them find ways to save while still paying the bills. Here are her tips for making saving easier on all of us.
1. Thwart add-on costs
Dagnino often sees issues arise when people purchase big-ticket items that have recurring costs they didn’t factor into their budgets. “They think of a major purchase as a one-time cost, when, in fact, there may be additional associated fees attached,” she says. Think kids’ activities that require uniforms or equipment, or a new vehicle that needs insurance and gas. She suggests doing some research and making a budget that includes all of those costs. Ultimately, you may have to decide on a vehicle that uses less gas, or choose sports that have fewer add-on expenses, but then you won’t have to dip into savings when bills come due.
2. Start saving automatically
You can’t spend money you don’t have, right? So pretend that you don’t have it. Set up a savings program with your bank that automatically diverts a percentage of your paycheque to a savings account you can’t access with your debit card. Chances are you won’t even miss that spending money, and you’ll see your savings grow.
3. Pay down your debt
The old adage is true: it is important to pay yourself first. That is, unless you have significant debt. Accumulating interest can hobble your ability to save long-term, so it’s worth diverting funds to debt repayment. First you need a plan, which should include switching to low-interest credit cards. Once your debt is gone, set up an automatic withdrawal that deposits the money that would have gone toward it into your savings.
4. Learn what you don’t know
Think you’re financially savvy? You may be missing crucial information that could help you get ahead. And no, you don’t have to spend money to get educated. “Communities offer free resources that provide excellent opportunities for saving,” says Dagnino. “The library is a great place to start for courses on financial literacy.”
5. Shop smarter
Bad shopping habits can zap your savings. “Establishing healthy patterns around purchasing can help you spend less,” says Dagnino. Planning ahead is key. If you’re running out to the corner store because you forgot to pick up dish soap on your weekly grocery shop, you’re paying higher prices for convenience. Shopping around for the best prices will also help you save. For example, farmers’ markets or urban farms sell fresh, healthy, organic food without the high price sometimes found in big-name grocery stores. Case in point: Black Creek Community Farm at Jane and Steeles sells produce without the markup.
To learn more about some of the difficult financial decisions faced by people living on a low income, try our online poverty simulator and challenge your perspectives on poverty. You can also brush up on your financial skills or find additional support in your neighbourhood by calling 211 or visiting the Jane/Finch Community & Family Centre, an agency committed to advancing financial literacy through support services, such as income tax clinics and workshops.