Financial Tips for Saving Money in 2021

It’s no secret that many Canadians have been struggling to make ends meet; in fact, even in 2019 (before the start of the coronavirus pandemic), an estimated 48% of Canadians reported that they have less than $200 left in their bank accounts after paying their bills each month. Combine this with the further financial challenges of 2020 (including high unemployment rates)—and it’s no surprise that many Canadians have a simple resolution for the new year: save more money.

If you fall into this category, you may be wondering where to begin when it comes to setting aside more money and living a more financially secure life. While none of these tips will solve your money woes overnight, implementing some basic budgeting and saving rules can make a huge difference in your financial well-being this year and beyond.

Start By Creating a Detailed Budget

You can’t begin saving money if you don’t know where you stand, so it’s important to start by creating a detailed budget breakdown. The goal here is to figure out approximately how much money you have coming in each month versus how much you’re spending (and what you’re spending it on).

Typically, the easiest way to create a budget is to download the last few months’ worth of your bank and credit card statements. From there, calculate your average monthly income versus your average monthly spending. It can also be helpful to break down your spending into different categories (such as rent/mortgage, debt, utilities, entertainment, etc.) to get a better feel for where your money is going.

Stop Paying for Services You Don’t Use

Next, it’s time to start cutting down on your non-essential spending so you can start sending more funds to your savings account. One of the best ways to cut down on unnecessary spending today is to cancel services that you no longer use or don’t really need.

Streaming subscriptions are an excellent example here. While $14.99 per month may not seem like a lot of money to pay for a basic Netflix subscription, it does add up to nearly $180 per year. And when you’re also paying for other streaming services on top of that, costs can quickly get out of control. Instead, consider paring down your subscriptions to just one or two that you get the most use out of.

Set Up Automatic Transfers With Your Bank

Take some of the sting out of saving money by setting up automatic transfers from your chequing account to your savings account. Many banks these days even allow you to set up this feature online (if you have access to online banking). You can arrange for a certain dollar amount to automatically be transferred to your savings account every two weeks, monthly, or on any other schedule you’d like.

Another option to explore with your bank is a program that automatically rounds your change up and deposits it into your savings account with each purchase you make using your bank card. For example, if you use your card to buy something that costs $9.55, the amount will automatically be rounded up to $10—with the spare 45 cents going directly into your savings account! It may not seem like much, but it can add up over time.

Scrutinize Your Credit Report

How can your credit report affect your savings account? Well, if there are errors or other mistakes on your credit report, your credit score may be impacted as a result. And because your credit score is taken into account when determining your auto insurance rates, interest rates, and more, you could be paying more for these services than you need to.

By obtaining a copy of your credit report and disputing any errors on it, you may be able to give your credit score a boost that, in turn, makes you eligible for more savings.

Visualize Your Money as Time

One last piece of advice to keep in mind is to start visualizing your money as your time. For example, if you’re thinking about making a $100 purchase and you make $20 per hour after taxes, think about whether or not that purchase is worth five hours of your working time. You might be surprised at how your attitude toward spending money changes when you have this mindset.

The Final Word on Saving More Money in 2021

Small changes in your financial habits and lifestyle can add up to a big difference, so be sure to keep these tips in mind.