It’s always smart to work on building up your savings by putting money aside at regular intervals, then setting back and letting it grow.
Whether you’re saving for retirement, a specific goal or purchase, or just want to have some extra cash in an emergency fund, boosting your savings also helps increase your financial flexibility and independence.
If you’re looking to grow your savings in 2024, there are several different strategies worth trying. Check out these savings tips and find a method that will help you hit your savings goals!
Find the right place to stash your cash
One of the most important parts of any savings plan isn’t just finding the money to contribute, it’s finding the right place to put that money. The days of stashing savings under the mattress or in a jar at home are long gone. To make your savings plan successful, you’re going to want to earn some interest. That means shopping around for a high-interest rate, low-fee (preferably no-fee) account where you can make your contributions.
Once you start building up a savings base, you’ll have more options with your money. For instance, you might choose to invest some of your savings in a Guaranteed Investment Certificate, or GIC, which pays a fixed rate of interest over a predetermined period ranging from 90 days to as long as five years. Your money can’t be accessed without penalty in that period, which is why it’s important to start by establishing a solid savings base you can use to react to a financial emergency.
If you don’t need your money right away, consider a Term Deposit, which tends to have a higher interest rate than most savings accounts. Another wise idea is putting some or all your savings into a Tax-Free Savings Account, or TFSA. Even if you end up needing to withdraw some of the money later, you won’t have to pay any tax on the interest you’ve earned.
Set it and forget it
Putting money aside for savings is easiest when it happens automatically, without having to remember anything. Find an amount and frequency you’re comfortable with, then set up automatic transfers into your high interest savings account. For instance, contributing $25 per week will give you $1,300 after a year, and that doesn’t include the interest you’ll earn.
If you’re employed, find out whether your workplace offers a program where your savings contributions come from automatic payroll deductions. Such programs are great because the deduction feels invisible—you earn money, it gets put into savings, and you never have to resist the temptation to spend it.
Save $1,378 this year by starting with a single dollar
Here’s a simple savings plan that’s great for people who think it’s going to be too hard to find money in their budget: the 52-week challenge.
In week one, you start by contributing just a single dollar to your high interest savings account. In week two the amount rises to $2, and the contribution total continues to increase by $1 dollar per week over the course of a full year. After you contribute the final $52, you’ll have put aside $1,378, and probably earned a few extra dollars in interest along the way.
Some people flip the script on this challenge and start by contributing $52 in the first week, then decrease the amount by a dollar every week thereafter. Besides making the savings challenge more of a downhill finish, this approach also increases your interest earnings by frontloading the biggest contributions.
Try a no-spend challenge
In a previous blog, we wrote about no-spend challenges, where you try to eliminate all unnecessary spending over a fixed period, generally around one month. That means no buying a new sweater at the store, no dining out or going for drinks at the bar, no coffee shop visits, and so on. It’s still okay to spend on essentials, such as groceries, utilities, rent or mortgage payments, and whatever else you absolutely need.
Besides making more money available for savings goals, a no-spend challenge is also a great way to examine (and possibly change) your spending behaviours, helping you see the true cost of a daily latte run, the budgetary impact of a weekly visit to the mall, and the financial effect of ordering food compared to cooking meals at home.
Apply a 30-day waiting period to non-essential purchases
Another way to make sure you don’t spend too much, thereby leaving more money to meet savings goals, is to force yourself to wait 30 days (or whatever time frame you prefer) before following through with non-essential purchases. That way, instead of clicking the buy button on a new pair of shoes, or impulsively buying an item you see at the store, you’ll spend more time window shopping, thinking about how much you actually need the latest item to catch your eye.
