15 Money Saving Tips To Live By

I’m often asked to share my best or favourite money saving tips. It’s hard to pin down just one when there are so many ways to save money and build lifelong financial habits and skills. That’s what financial literacy is all about, right?

Here are 15 money saving tips that I try to live by:

15 Money Savings Tips To Live By

1. Make it automatic.

The key to building a life-long habit of saving is to make your contributions automatic and as painless as possible. Pick a day that coincides with your paycheque and set up an automatic transfer into your RRSP, TFSA, savings account, or RESP. Start with as little as $25 and increase it annually, or as your budget allows.

2. It’s never too late to start saving.

The best time to plant an oak tree was 20 years ago. The second best time is now. Whether you’re 30, 40, 50, or 60, it’s never too late to take control of your financial future. See tip number 1 on how to get started.

3. The power of asking.

I challenged readers a while back to take a day off work to deal with their finances. A “bill haggle” day can help reduce your monthly expenses on everything from bank fees to cable and internet to insurance. Mark it down on your calendar once a year as your reminder to save money. You never know unless you ask.

4. Does your loyalty pay?

Most of us bank at the same place we did when we opened our first savings account as a child. Ask yourself what your bank has done to deserve your loyalty. Today, there are many free banking options, and online comparison sites have made it easy to shop around for the best deal on mortgages, savings accounts, and GICs.

5. Ask for more.

When I got my first real job, I naively accepted the initial low-ball salary offer. It was a mistake that cost me at least $5,000 per year. Remember, all your future wage increases will be pegged off of your initial salary. Know what you’re worth, what the industry pays, and negotiate wisely.

6. How much you save matters more than your return on that savings.

We obsess over investment returns and are willing to move mountains to get an extra half-percent on a savings account or GIC. But in reality, your savings rate (i.e. how much you save) will make much more of an impact than your annual returns, especially in the early years. Up your monthly savings from $100 to $150 and you’ll enjoy a 50 percent increase in your savings.

7. Track your income and spending.

The foundation to solid money management is understanding how much money comes in and how much goes out every month. There’s no other way around it – how else will you know what you can afford to save?

8. Estimate your future income and expenses.

Budgeting goes beyond just tracking what you’ve spent in the past. In order to make a plan for the future, such as to buy a house or car, or save up for a trip, you need to project where your finances will be several months in advance. We often forget about those irregular expenses, such as car maintenance, birthday presents, when a raise or bonus might kick-in.

9. Avoid the trade-up trap.

Tens of thousands of dollars have been wasted because homebuilders and real estate agents invented terms like “starter homes” and “trading up”. Buy a home that will suit you for the next decade or more, and stay put.

10. That goes for cars, as well.

I like a new car as much as the next guy, but if you can’t afford to pay it off in 3-4 years max, you can’t afford the car. And quit trading one in for something new every three years! Drive your vehicle for at least 8 to 10 years so that you can enjoy some car-payment free years.

11. Simplify your finances.

In an attempt to optimize every part of my finances I forgot to account for the pain-in-the-ass factor – the time wasted researching individual stocks, hunting down credit card offers and savings account promotions, transferring money back and forth between a no-fee bank and a full service bank. There’s something to be said about finding a simple solution that you can stick with, even if it’s not the most optimal solution.

12. Develop an entrepreneurial mindset.

They say you won’t get rich working for someone else and I think that Millennials need to develop an entrepreneurial mindset in order to succeed in today’s economy. Start a business, work on a side-hustle, move across the country (or to another country) and don’t wait for the ideal career to fall into your lap.

13. Save on the big things

People often stress over gas prices, bank fees, and cell phone bills while ignoring some of the ways they can potentially save thousands of dollars. Take out a variable rate mortgage instead of a 5-year fixed rate mortgage, avoid mortgage life insurance and other creditor insurance products, switch from expensive bank mutual funds into index funds or ETFs, avoid expensive name brands when a generic brand will do, and don’t fall for deceptive or misleading advertisements.

14. Live close to work.

We save money on gas because we bought our house close to where I work. Our fuel expenses are between $100 and $150 a month. One reason I was late getting into podcasts or audiobooks is because I have a five-minute commute to work instead of a 45-minute drive or train ride.

15. Spend on things you enjoy.

I’m not a big latte fan, but if you enjoy an expensive coffee then who am I to criticize? Spend on things that bring you joy (or that save you time) and then try to save money in other areas to offset your splurges. Go ahead and share your money saving tips in the comments section below.

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  1. KC on November 21, 2018 at 7:58 am

    Given that the interest continues to go up, the variable interest rate mortgage might not be the best idea in the future. If that’s the case, one might opt for a shorter term on variable then switch to fixed if it’s obvious that they’ll keep hiking the rate thereafter or get a variable interest rate with a fixed payment.

    Great tips, otherwise!

  2. Deborah S. on November 21, 2018 at 7:59 am

    Good tips. My favourite: Live beneath your means. Works every time!

  3. Sandy Bard on November 21, 2018 at 8:32 am

    People are usually very surprised to learn that we EAT AT HOME – very rarely do we go out to eat. The last time we ate a meal in a restaurant was July 1/18. We each ordered a pasta dish; salad was supplied and we drank water – that was it. The bill including tip came to $45!!!!! No appetizer, no dessert, no alcohol, no coffee afterwards . . . . Convenience comes at a cost – that same meal at home would have cost pennies on the dollar.

  4. Sandra Flagler on November 21, 2018 at 8:52 am

    Wasted food is wasted money. Use up what is currently in your cupboards and fridge. When you finish the last item, put it on your grocery shopping list. Don’t let food expire and get thrown out. Run out of tuna fish for that sandwich…then use up the eggs in your fridge and make a toasted fried egg or egg salad sandwich instead.

  5. Angelo Bin on November 21, 2018 at 11:35 am

    We can obsess over saving money. There is a time when one spends just for the joy of it.
    My wife and I both worked almost forty years at our jobs. Now, we find our pension amounts are more than we spend. Is it time to splurge? You bet!
    Our new rule for ‘saving’ is: at the end of the year, make sure you spend every cent of your pension money received, spend it on any and all things you want or crave.
    We saved like crazy during our working life and find we don’t have to touch our investments.
    Go to a restaurant and not order a glass of wine? Not likely. Upgrade your accommodations in Europe? Everytime.
    Do we feel lucky and blessed? We give thanks daily for what we have been given.

    • Alastair Stewart on November 22, 2018 at 10:15 am

      Great post Angelo!

    • Brian on November 24, 2018 at 9:44 am

      Agree great post Angelo. We are in the same exact situation except we are having a hard time letting go after raising 4 kids on one salary the habit of saving, saving, saving is hard to break. Our kids are encouraging us to spend more as they are all very independent and well on their way growing their own wealth ( I also pass on all Boomer and Echo posts). I think we neeed some life coaching to get us out of this frugal rut. Your plan seems to be working for you and we may just adopt it. Haha

  6. Alastair Stewart on November 21, 2018 at 12:27 pm

    Pay for your car with cash, maintain it and keep it at least 10 years and start saving for next vehicle the minute you get your new one. (Who am I kidding I’m preaching to choir here) lol

  7. Alastair Stewart on November 21, 2018 at 12:35 pm

    Buy your car for cash, maintain it, keep for at least ten years, and start saving for your next vehicle the minute you get your new one. (Who am I kidding – I’m preaching to the choir here) LOL
    P.S. this has worked so well for me for decades I can afford to double down this time and am buying a winter and fair weather vehicle at the same time!

    • Alastair Stewart on November 21, 2018 at 1:38 pm

      P.P.S. Double down is a figure of speech – another tip is ‘don’t gamble’

  8. Theresa FitzPatrick on November 25, 2018 at 6:07 pm

    I love your blog and ideas from contributors…we are a priveleged early retired couple who too saved and saved for years. We take nothing for granted and save everywhere we can….put one car away for winter, eat meals based on sales of the week, carry a thermos of coffee most places we go, buy good used clothing, etc. We do travel and treat ourselves then. Saving money is not rocket science…I hope those that need advice most tune in here weekly…fabulous information! Thank you

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