4 saving money questions you’ve definitely asked yourself
December 04, 2019
Being a credit union, we get tons of questions on the best tips, tricks, and strategies for saving money. So, we’ve decided to compile a list of the top frequently asked questions for all to see. Check em’ out below.
1. I’m a beginner at saving money. How can I start?
The good news is, it’s never too late to start saving money. If you’re a beginner the following are some easy ways you can start pinching your pennies (sometimes without even knowing it).
Just start + devise a plan
If you’re new to the world of saving money, just starting, even if it’s something small, is half the battle. A good place to begin your journey is the 50-30-20 rule.
- 50% of your income should go to needs (like food, housing, transportation and bills.)
- 30% to your wants (hobbies, dining out, or shopping. Anything FUN!)
- 20% into your savings.
Nickel + Dime
The Sunova Nickel + Dime account will round up all your debit purchases to the nearest dollar. Then, the difference is put into your savings account. It’s the gift that keeps on giving!
If you want more killer tips to kick your savings into high gear, make sure to check out our post ‘6 saving tips from your favourite St. Bernard’ for a D.O.G certified blog post that is guaranteed to help you save just like Bill, the St. Bernard. (That’s a good thing!)
2. I’ve never invested before, what are a couple of things I can do to get started?
Naturally, investing and saving go hand in hand. They’re like two peas in a pod. Brothers from another mother. As thick as thieves. Like peas and carrots. (Okay, you get it…)
Before you begin investing, you should figure out the following:
- What is your overall goal? What are you saving for? Why are you investing?
- Your ideal timeframe.
- Your risk tolerance.
Once you’ve put some thought into the above, it’s probably time to visit with a Sunova wealth manager to discuss your investment portfolio. You’ll be on the path to investing and saving money in no time.
3. How does a TFSA help me with saving money?
A TFSA (or tax-free savings account) allows you to earn interest tax-free (imagine that!) That means your money grows more quickly, plus, you’re not penalized if you decide to take your money out.
If you want to learn more about TFSAs, check out this post: the truth about TFSAs (and why you should open an account today). It has all the juicy details about TFSAs and why they’re pretty sweet.
4. What is lifestyle creep and how do I avoid it?
If you’re serious about saving money, being aware of lifestyle creep (and how to combat it) is super important to a successful savings plan.
Lifestyle creep is when your standard of living improves as you do better in the workforce, and in turn, your salary increases and former luxuries slowly become necessities. If you fall victim to this, saving money can become a thing of the past.
Here are some things you can keep in mind when trying to avoid lifestyle creep:
Once you understand what lifestyle creep is, you need to try to actually save the new money you are now making. A good rule of thumb is to save 70% – 90% of every increase in salary or pay.
Create a budget
Maintaining a budget will help keep your spending and finances on track. If you’re new to the thrilling world of budgeting, don’t worry. We’ve got your back with this handy guide: budgeting for beginners.
Choose your hobbies + extracurriculars wisely
If your salary increases by 10K and you suddenly find yourself taking up skydiving as a hobby, you may want to re-evaluate your priorities. If it’s something you’re really passionate about we say go for it, but keep in mind the money you are spending along the way.