Rent, phone bill, groceries, utility bills…the list goes on and on. Thinking about paying all your bills, mixing in a little bit of fun and saving some money for a raining day is an overwhelming topic. Many students avoid preparing a savings plan because it’s tough, causes anxiety, or simply believe everything will fall into place when it’s supposed to. However, just because you turn 30, doesn’t mean that you will suddenly have an amazing, well-rounded savings account. You have to start early and work towards it with focus and diligence. So, how do you do this? Don’t worry, we have compiled a list of things that will help you get on your track to success.
Talk to a Financial Advisor
One of the first and best things to do is to talk to a financial advisor. Let them know what you are hoping to achieve in the next 2 years, 5 years, 1o years and 30 years. Go over what your expenses are and how you pay them. A Financial Advisor is an incredible resource to have in your corner. Especially once you have begun a relationship with them. The better you get to know your financial advisor, the better they can help you with your saving plan. They can easily set up savings accounts, RRSP’s, education funds and TFSA’s. They can provide advice on how to pay your bills. Maybe having your bills come out of a certain account is costing you extra because you are paying a fee every-time you withdraw money. Financial advisors are a wealth of knowledge that you can easily take advantage of!
Set a Goal
What are you saving for? And when do you want to have that money in the bank? It’s time to define the goal you are aiming for with your savings plan. Are you wanting to start things off with a bang and save for retirement? Is it the trip of a lifetime, maybe it’s the down payment for your own place. Or, maybe you want to invest in a personal hobby. This could be purchasing that awesome camera you’ve been eyeing up or maybe those concert tickets to your favourite artist. Whatever your goal may be, be as specific as possible. Know what you are wanting to achieve will help you to stay motivated.
Open a Savings Account
Do yourself a favour and open a savings account, or five. Having all your savings in one big account can be very confusing and difficult to determine what the money is meant to be used towards. Having different savings accounts for different goals will help you track how much you are putting away and you won’t accidentally use money meant to be for your down payment to go on a vacation. Keeping your savings accounts organized will alleviate some of the stress and take the guesswork out of it.
Track & Trim
Sitting down and tackling your budget isn’t fun, but it’s necessary if you are serious about setting saving goals and investing in yourself. This step is inevitable if you want to determine how much is possible for you to save. Start by writing our all your fixed monthly expenses and see if there are any areas that you can trim down – maybe you can change your phone bill, be more conscious of utility usage or grocery shop more efficiently. Then subtract your monthly expenses from your monthly net income and see what you have to work with. From the remaining amount, what can you cut back even further? Maybe you’ll want to eat out less or make coffee at home to put saving priorities first?
Now, just because you are bringing your lunch from home and planning out your dinners, doesn’t mean you can’t have fun. Set yourself some money aside in a ‘fun fund’. You don’t have to save every single dollar for future you, it’s important to enjoy yourself and have some fun every month. This will keep your savings plan from feeling too restrictive. Simply being aware and maximizing pleasure from your day-to-day expenses. Saving $5 per day on coffee out is equal to a nice meal out with friends on Friday night.
Whatever your savings goal may be, we can help! At Osoyoos Credit Union we are here to relieve some of the stress brought on by creating a savings plan. This experience of setting future goals should be exciting, and that is what we are here to do!