create the ultimate savings strategy

Over and over again, we keep hearing that Canadians just aren’t saving enough. According to reports, we owe too much, spend too much and don’t have a saving strategy in place to create a nest egg for retirement and emergencies.

What better time than now, the New Year, to put savings back on your radar? Here are some savings strategies that can take this beyond a mere resolution into an actual game plan.

Pick a Number

As a ballpark, we should all be saving about 10 per cent of our incomes. So if you bring in $5,000 a month, that’s $500. When you get a bonus or an inheritance or any extra money, sock away 10 per cent of that too! If you don’t have a regular income, adjust what you save to what you make each month.

You need to save for things like going on vacations, buying a car and having a fund for emergencies. As well, you’ll want to look ahead to retirement. Depending on your situation — if you have a pension and your age — you may need to save more to stay ahead for retirement.

Find a Balance

How much you save is going to fluctuate based on your life. If you have young children, it might be very difficult to save, as it is when you’ve just moved into a home that needs renovations.

If you are dealing with a lot of debt, you should put paying that down first. Still try to save a little, but focus on paying down what you owe.

You’ve got to find a balance between saving, spending and paying off debt, and you’ll need to keep reassessing this balance. For instance, once you pay off your student loan, it’s time to save more. When kids stop needing daycare, same thing.

Find Great Places to Save

Look around and get to know more about some of the financial products available to help you save. Choose a mix of products and never rely entirely on yourself: do automatic payments on a monthly or even biweekly basis to force yourself to save.

High Interest Savings Accounts

Bank accounts are not known for their high returns, but most financial institutions have high interest savings accounts that do give you a decent interest rate, in addition to being flexible. In other words, you can get your money any time, making them great vehicles for saving for vacations, renovations, emergencies and general big purchases.

Click here to learn more about the best high interest savings accounts.

Tax Free Savings Accounts

Tax free savings accounts are tax-sheltered, registered accounts that let you save money in a variety of high and low risk ways through a financial institution or investor service. In 2013, you can put aside as much as $5,500 in a TFSA. Whatever interest you make will never be taxed and when you withdraw the money now or many years in the future, even in retirement, it won’t be taxed then either.

There’s no penalty for taking money out of a TFSA, so you can use them for short-term savings, like for your next vacation, or as a retirement savings strategy.


Registered retirement savings plans are the main way Canadians without pensions save money for retirement. The best thing about RRSPs is you get a tax break when you invest through an RRSP. The downside: you will pay tax when you take money out in retirement. The money is not easily accessible: that’s not great if you need money now, but it’s ideal for protecting your long-term nest egg!

Saving in 2013 is not really about a New Year’s resolution, but more about changing your attitude about money. It’s not just for spending on the latest deals, but also for making sure the future is secure.