The Recipe for Long-Term Savings Success

It’s a known fact that most Canadians don’t save as much as they should. According to a recent survey by BMO Financial Group, 70 percent of baby boomers said that they did not feel that they were on track with their retirement savings but they also said that they were willing to make sacrifices to get by.

So what are those sacrifices they will have to make? 83 percent said they were willing to put off retirement and work later in life than they had originally planned.  Others said they would refinance their homes or downsize to a less expensive residence, forgo owning a second property, retirement travel, or give up their vehicles.

The next question is – what do they wish they had done differently? 81 percent said they wish they had started saving earlier, and 91 percent agreed that saving enough to retire on takes a lot of planning and advice.

These statistics are frightening, however, there are so many little things you can do today that will change your financial future for the better.

The following are a few simple ideas to get you started and eventually win the savings game:

(1)   Open a savings or money market account with your financial institution and contribute to it on a regular basis. Many people don’t consider building a fund for liquidity purposes, but in event of an emergency or opportunity, this would come in very handy.

(2)   Go outside of your comfort zone. If you think you can save $100 per week, bump it up to $125 and see how that works for you for a few months. Experts suggest you save 10 percent of your income. If 10 percent is uncomfortable, keep in mind that a little bit is always better than nothing at all!

(3)   Every day, take a dollar – or $5 – out of your wallet and put it aside. Once a week, deposit it into your savings account. Another idea is to keep all your change and put it in a jar on a daily or weekly basis. You can’t imagine how quickly this will add up to hundreds of dollars!

(4)   Monitor your ABM withdrawals. Banks have significantly increased their fees, especially if you’re using private bank machines at places like convenience stores. Decide how much you will take out each week and make it last.

(5)   Picture your goal so that you can start focusing on what you are saving for.

(6)   List your credit cards, beginning with the one with the highest interest rate. Begin paying extra every month on the card with the highest rate, and when that one is paid off, move to the second-highest rate card. You can also try calling your credit card company to see if they will offer you a lower interest rate, or a special rate transfer.

(7)   If you have had the same term life insurance policy for some time, call an insurance advisor to see whether or not you could reapply for a new policy at a lower premium. If you reapply for the coverage and get a fresh medical exam, the insurer might see you as a better risk.

(8)   Enlist the services of a financial planner. A good planner will help you determine your future goals, review your current situation, and help you implement a plan that will enable you to reach those goals. Go to one of the following websites in order to find a planner in your area: www.advocis.ca or www.cfp-ca.org.

If you start with these basic principles, you will win the savings game. Every little bit you do today will result in great rewards down the road!

Good luck on your journey!