So you want to save for a big purchase, huh? Congratulations to you! If you’re anything like me, you’re always looking for new ways to improve current life processes and searching for new methods of doing things. Money management is one of them. As I am nearing the end of my 20s, one of the biggest lessons I’ve learned is that all the years we spend in school do not prepare us for the ‘real world’.
I spent many long, agonizing weeks nearly pulling out my hair trying to understand the pythagorean theorem and using the random characters on the calculator that nobody ever pays attention to. None of that, however, taught me financial literacy and that one of the valuable assets you can have as an adult is your ability to acquire and save money.
Thankfully, my mother instilled the value of money and financial responsibility in me at a young age, so by the time I turned 15, I had landed my first part-time job. It was by no means a money maker, but it taught me to work hard and if I hadn’t known before, I now knew that money certainly didn’t grow on trees. Though I didn’t need to save for a big purchase at a young age, I learned the fundamentals that would help me do so in my adult years.
Fast forward to today. As my husband and I are now preparing to make the biggest purchase of our lives and soon become homeowners, I’ve gathered a few great tips that have helped us save money. A big thing for many people is finding a way to put a significant amount of money away regularly without feeling restricted and having to drastically change their lifestyle. We feel the same way.
Open an Interest Bearing Savings Account
This may seem like a no-brainer but you’d be surprised by the amount of people that use their daily operating account to save. Having the distinction between cash flow that can be used for day to day purchases and money that is not to be touched is extremely important. With the ease of digital and contactless purchases today, you can be one tap or click away from spending money that you shouldn’t be giving yourself access to.
The advantage of opening an interest bearing savings account is that while your money is sitting in your account and collecting dust, you are earning interest on that dust. Depending on the bank, some will offer interest on the balance (the total amount sitting in the account) while others will pay interest on the deposits made on a monthly basis. Of course the former would be the ideal option but both are still great methods to earn a few extra dollars a month on top of what you are already saving.
Utilize Free Personal Finance Apps and Services
There are a ton of free apps and programs that can teach you finance tips and help you get on the right foot when it comes to saving money. Mint is one of my favourite apps that I have on my phone that integrates with my bank account, allowing me to have a birds eye view of my spending habits.
Based on your spending and budgeting goals, it helps you figure out ways to make the most of the money you have coming in and makes personalized recommendations. The best thing about Mint is that because all your accounts can be linked together in one app, it makes the task of checking in on your progress seamless and stress-free.
Another great service for helping you improve your financial literacy is Pigly. Pigly is an all-in-one service that guides you through the different areas of finance, providing you with strategies and calculators for each one. I think of it almost like a crash course in personal finance. They go into extreme detail about what saving for retirement would look like if you start young or about how to open up a credit it card and manage it in a way that improves your credit, among other topics.
I highly recommend Pigly for someone who is starting out on their financial journey as they provide you great tips and resources to consider well in advance of you taking steps towards your goal or in my case, saving for a big purchase. Remember, it’s not about how much money you make rather what you do with it and how you allocate your access funds.
Get in the Habit of Price Matching or Shopping Around
Some people may find this one a bit annoying but I think it makes all the difference in the world. One of my favourite things about grocery shopping is finding the things I need at the lowest price. My favourite price matching app is Drop and the best thing about it is you can do your shopping in one store while taking advantage of low prices offered at different retailers.
Another amazing thing about Drop is that it’s not only for groceries and household items. You can price match just about anything that you could possibly need, whether it’s a new TV, a BBQ for the backyard or a crib for your baby.
BONUS: Save your Tax Returns
This is a bonus tip that is the easiest of them all. Save your tax returns for the year. The great thing about tax returns is that it is a lump sum of money that you never budgeted for! It acts as the perfect jump start to your savings or a boost to your already growing funds. As soon as my tax return comes in, I like to deposit it right into my savings account without even giving it a second thought. Pretend the money never existed!
I’ve shared four tips with you that will be very helpful for you as you get your money in order and start to save for your big purchase, whatever that may be. Even if you just want to become a better spender and build a better relationship with your money, these tips will come in handy. So to recap: open an interest bearing savings account, utilize free personal finance apps and services, learn to price match and shop around, and save your tax returns every year.