: How Do You Save Money?


monokitty
Sep 15th, 2009, 11:38 AM
Here's a curious subject: How do you save your money, excluding limiting what you purchase? For example, do you put away a pre-determined percentage of your income each month? What kind of savings account(s) do you use? (Regular savings, mutual funds, etc.) Or do you just put away what happens to be left over (an inconsistent amount each month, if at all)?

DempsyMac
Sep 15th, 2009, 11:54 AM
nice change (no pun intended) of topic Lars.

I currently have two things.

First I have been doing for a long time, my bank auto withdraws an amount the day after I get paid and it goes right into my RRSP's this way I can't say oh not this month there is a new xbox game etc etc.

The second is that when ever I have some extra cash in my wallet (or change) I crop it in a bucket and that is our Disney World fund, my wife and I are taking the kids in the new year so that will be our spending money. The key thing with that one is that I have been very picky about replacing anything that we take out to save a trip to the ATM. EG my wife needs parking money so she takes out a few toonies I make sure it is replaced with a $20 that way it costs us more every time we dip in.

Dr.G.
Sep 15th, 2009, 12:01 PM
I put aside a given amount each month in Canada Savings Bonds via payroll savings, and then cash them in each year or so for my RRSP contribution. I also use a Shoppers Drug Mart Optimum card and their MasterCard for savings on items there. To date, I have gotten over $3500 worth of free things from Shoppers since they started this card way back when. We also use Air Miles for Sobeys gift certificates (which saves on food) and use our Infiniti Visa card for flights on various airlines. The trick with the credit cards is to pay it off in full each month so that you get the benifits but no interest charges.

Still, the best way to save money is not to buy things you don't need.

chasMac
Sep 15th, 2009, 12:02 PM
My wife gives me an allowance.

rgray
Sep 15th, 2009, 12:03 PM
Save? :confused:

HowEver
Sep 15th, 2009, 12:25 PM
Money??

rgray
Sep 15th, 2009, 12:31 PM
Save? :confused:

Money??

I think this is something like putting the terms "spare" and "change" together..... ;)

MLeh
Sep 15th, 2009, 02:29 PM
Use it up, wear it out, make it do or do without.

But, like Dr. G said, the best way to save money is to not buy things you don't need.

We have a budget of sorts. Approximately half our money goes into our chequing account, the other half goes into a savings account. Back when we had a mortgage the savings account was destined for paying down the principle on the mortgage, which we renewed annually.

Now that the mortgage is paid off the money just goes into GICs.

If the money for what we want isn't in the chequing account, we do without until we've saved up enough in that account to pay for it.

We once borrowed money to buy a truck. Once the truck was paid off we just kept saving the same amount (we'd been living okay with the money going out, so it wasn't perceived as any sort of hardship), and then the next time it rolled around time to buy a vehicle we had the money saved up and ended up not having to borrow any.

Any raises we got over the years have also gone into savings - we just live on the same amount as we always have, with slight increases for inflation as necessary.

The secret to saving is living below your means.

EvanPitts
Sep 15th, 2009, 02:59 PM
It's simple - control expenses, and do not spend more money than what you have.

My pay goes into a chequing account until it reaches about $2000. All expenses and my "allowance" are drawn from this. Once the account goes above, then my pay goes into my savings account, and does so until the chequing account dips below $2000 again. The only exception is the months after New Years, when I ramp the chequing account up to cover my car insurance.

I do not spend money I do not have, so because my pay is always 3 weeks behind, I always have that as extra padding. I spend what I earned in previous months, not what I earn this month, or what I might or might not earn next month. I think the main problem people have with "saving" is that they insist on blowing the paycheque they just received, or in many cases, blowing a paycheque they have not received yet.

It requires the control of impulses. I tend to put off purchases. I'll go look around, find what I want, then wait a few months. Most of the time it ends up on sale, which translates to savings if you don't blow the savings on something stupid. It's all about getting more out of what you have, so even if you have a raging desire for some new computer, hold off a year because by then, you can get more for less.

Reviewing expenses is a tough thing for most people. Some things cost large, like having "long distance plans" for your telephone, which may sound good (and is good if you use an extreme amount of LD - but really, they end up skimming at least $120 per year from you - which is a lot of LD. Same with costly extras like Call Waiting or Call Display. Now if you need LD for business, and hence, you are scoring money by having it - then so be it. But the regular person probably does not need it. Same with expensive "bundles" that "save you money" - yeah, no corporation gives anything away without their gallons of blood. So determine if having 400 channels is worth all the cash - or if you can make due with regular TV (or even with an antenna, which is entirely gratis on a monthly basis), and can augment with borrowing DVDs from the library.

Savings is generally drained by the numerous small things, rather than any large things that require study and thought. Plus, credit and debit cards drain savings, if you treat them like some repository of cash that you can abuse at will. I use credit cards only if I have the money in the bank, and I generally pay off the card once I get to the bank, so I rarely have a debit balance on my card. Debit cards are equal in evil, as it lets you tap into your bank at will, fulfilling every impulse without a control. In my system, I actually physically go to the bank for money - so that gives me time to realize I don't need the crud that I was thinking about buying.

An allowance is a good idea. I give myself $200 per month for all of the miscellaneous stuff, and try to stretch it out longer. Sometimes I can't make it the whole month, since I pay for gas for my car out of it - but it keeps me from going nuts on buying things I don't need, and I don't use the bank cards for trivial items. It's all about having a system that imposes discipline and controls...

bryanc
Sep 15th, 2009, 05:08 PM
Save? :confused:

Debt is like savings, right?... I've got lots of debt and getting more is easy.

johnb1
Sep 15th, 2009, 05:20 PM
well- I know right now it's not easy, especially for me now that I'm unemployed (currently)
1) don't spend what you don't have, or more that you make
2) if you can, save up for it, don't buy it right away, unless it's a necessity
3) for small stuff, carry cash with you. If you don't have the cash, oh well

4) dollar store-when I can get dark chocolate bars there 2 for a buck, and cans of lunch meat for a dollar each vs. 1.99 then that's okay. Bear in mind though that some of the stuff can be pretty brutal-the deluxe mac n' cheese is pretty sad, and you don't get much coffee, for a buck. There's always a little something different going there every time you come back-usb printer cables for a buck? Why not. same with veggies. If you can find a place that does veggies that are a little ripe for cheap, or a big bag of day old bagels or buns for cheap, and you're gonna use them, then that's money in your pocket

just my 2 cents

JB

Paddy
Sep 15th, 2009, 07:57 PM
As many have already mentioned, don't live beyond your means. We don't borrow for anything; we're fortunate enough to have paid off our mortgage - we made it a priority. We use credit cards that don't cost extra because they're tied to a checking account at TD. One gives us air miles, the other cash back. We put everything on them, but we ALWAYS pay them off in full each month. If you cannot control your spending using credit cards, don't use them. Credit card interest is ridiculous - don't spend beyond what you can pay off. My parents used to tell us that the only thing you should buy on time was a house - and maybe a car, if you really, really need one and can't pay for it upfront. Wise advice.

We don't buy new cars - they lose a tremendous amount of value in the first year or two. We buy low-mileage used cars with good reputations for reliability. (Toyotas and Hondas). We also drive our cars until they start costing more to maintain than they're worth or become unreliable. Our last two cars were 11 and 15 when we sold them.

Don't take your car to the dealership to have it serviced - find a GOOD independent garage and you'll likely save $$. There are a few things that only the dealer can do though (ie: replace one of those fancy new keys...for which they'll charge you an arm and a leg).

Buy stuff used. I buy almost all of my clothes used - and you'd be amazed at what you can find at Salvation Army and Value Village. Yes, you do have to be patient - it's a bit like prospecting at times, but believe me, the gold is there. I've got quite a few pairs of $70/$80 jeans that were either brand new or almost new and cost me between 99 and $9.99. Every cashmere sweater I own except one came from SA or VV. Our dining room table came from a Salvation Army store in MA (from when we lived there) - it cost me $160 with 6 chairs and it retails for over $2000. It's a huge maple farm-house style table with a leaf, from a high end SC furniture manufacturer - I looked it up when I got it home! That was probably my best find ever - and I wasn't even looking for it at the time. I buy a lot of our books used - garage sales and used stores - and of course, there is always the library, for the ultimate cheap read.

Buy other stuff used IF you are a savvy shopper who knows prices, can check working order etc. etc. Craigslist/Kijiji can be great sources of home furnishings at a fraction of the cost of buying it all new. Be cautious with electronic items - they are the most likely to be either problematic or stolen goods.

When you do make major purchases, do your research. The internet has made it very easy to look up consumer ratings on all sorts of things. Buy quality - don't buy stuff just because it's cheap, or you'll find yourself replacing it far too soon. And always ask yourself "do I REALLY need this?" (we all have our weaknesses of course...Canon lenses and Mac stuff being mine)

Do things yourself, if you're at all handy. Right now, my husband is installing hardwood floors on our second floor. We'll probably save several thousand by doing it ourselves. I do all the painting (except a tricky two-storey stairwell; I'm going to have to call someone for that one) and I've become very good at it - better than some pros. Not only do you save lots, but there is the satisfaction of having done it yourself. Cut your own grass, rake your own leaves (who needs a gym membership?). Rewiring a lamp is not something that requires a PhD in electrical engineering. Do know your limits of course - sometimes it's cheaper to get a pro from the beginning rather than messing up something on your own first. (I'm thinking about MAJOR home renovations here - things where building permits are required. Even there, you can save money by acting as your own general contractor IF you have some clue as to what you're doing and can adequately supervise subs)

As for saving - the old "pay yourself first" is good advice. My husband's company has an RRSP plan with company match to a certain point, so we fully utilize that. We also have his pay cheque split between our checking account (expenses) and a savings account. Periodically, as the savings account grows, we put some of it into investments. We also occasionally dip into it for large expenses. Even if you only manage to put a little aside in an RRSP, it's a start.

MazterCBlazter
Sep 15th, 2009, 08:36 PM
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Rps
Sep 15th, 2009, 09:00 PM
One thing we do is use the local library. We are lucky in that it has an exceptional video department and instead of renting movies we use that. We've seen virtually all new releases [ borrowed up to one week ] for free. We get new movies everyday, sometimes there are 2 or 3 reserved for us, so do the math, if the Qube is the cheapest rental at $2 per movie, and we can get say 6 movies per week, 12 x 52..... great deal!

EvanPitts
Sep 15th, 2009, 09:34 PM
Credit can be a good thing to have - just use it sparingly. Carrying a car payment or stuff like that is fine, so long as you don't go nuts - as having credit will improve your credit rating, which down the road, may reap benefits of lower interest rates on other loans. However, it is a bad idea to get a credit card and blow the limit out, because that is setting oneself up for usury and giant payments that have no benefit.

When it comes to car payments - check out the payment schemes very carefully. Leases look like a good deal because you only lease half the car, so in three or four years, you have to puke up the other half or pay for all the damage inflicted on it. The lease assumes that you will return a car in excellent condition with less than the prescribed miles on it, so if you return a car that is not that clean, covered in dents and scratches, and you blew the mileage limit by 100km expect to pay large for a turdmobile. Some 0% payment schemes look good, because nothing is wrong with 0% - but most of those schemes require you to front a $1,200 or so "administrative" or "financing" fee, something you don't pay if you are paying regular interest rates. It's that kind of stuff to be aware of. I have seen lots of people ripped off on the easy credit feel of leasing, and when the lease is over, none of them can figure out why they have to get a Safety and e-Check on what they wrongly thought was their car.

You can save money not buying all of the stuff they want you to buy in the "business office" - yeah, they give you the business. Stainproofing the seats - buy a can of Scotchgard and do it yourself, because that is what the dealer's lot lizard will be doing while the dealer scores a fat $90-200 for what amounts to ten minutes in the driveway with a $10 can of Scotchguard. Some dealers offer rustproofing - which is a good thing, until you see the dealer driving the car over to Krown, where you could take it yourself for $100 or so, while the dealer will want $200-300 to do the same thing.

Some deals can be had by buying Cap units - which are ex-rental cars. Many of them will have miles, but will have had proper maintenance, and will be perhaps a model year or two old. Generally, they are not dogs - car rental companies are in the business of capital tax writeoffs for investors, not in renting cars to you. Thus, they buy a car, use it for so long, usually 50,000 km, then turn it over. They can be quite good cars, but stay away from anything "performace", because there are people that happen to rent cars in order to get a performance thrill - I've seen such people at the drag strip in their Enterprise rental Chrysler 300's and Ford Mustangs...

Cars are a big, but necessary expense for most people. You end up better off by not buying crazy options that have no resale. I find that buying the middle product in a line yields the easiest sale in a few years. Not many want to pay for some stripped plain jane that only has an AM radio and no hubcaps, while most used car buyers won't pay large for excessive chrome, spinning wheel disks, 1000W stereos, etc.

Even operating a car, one can save cash by using the fuel appropriate to the car. "Premium" fuel is not better - it simply has a higher octane number that prevents preignition in high compression engines. You need Premium in a high compression engine or you will have some of the worst idling possible, with lots of dieseling after you shut the engine off. Most engines simply use Regular grade fuel, so spending an extra 10 cents a litre yields nothing. One can also use some techniques to save gas, like coasting to stops, avoiding jack rabbit starts, refraining from light to light drag racing, the use of cruise control on flat highways (CC wastes gas in hilly areas), planning efficient routes, etc.

Shop around for car insurance, especially on Ontario where changing a company can save you a 1000 large per year. Never shop by a monthly plan, always ask for the yearly cost, and then, if you can't afford to budget for a yearly payment, then talk about a semi-annual or monthly plan. You will pay more, but if you can't cough up the cash, well, you can't cough it up.

Rightsizing a car is important. If you are mostly in the city, then think smaller. Try to avoid the temptation of the giant Ford dualie because they are terrible in fuel, expensive for tires, and ridiculous unless you are in construction or farming where you will really use such a thing. Thinking smaller doesn't mean having a tiny car. Car makers have heard the message, and are making all kinds of intermediate vehicles. I find that my Matrix is perfect for my needs because it has payload I didn't have in the Corolla, while not being a gas hog. Many companies make the same kinds of vehicles, so instead of a giant truck based beast that gets 15 MPG, perhaps something a little smaller would do fine.

MazterCBlazter
Jan 18th, 2010, 05:05 AM
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Dr.G.
Jan 18th, 2010, 07:48 AM
I also use AirMiles. If you shop at Sobeys, they give you airmiles, plus money off of a gas fillup at Irvings. I have $80 of AirMiles refund coupons for Sobeys coming, plus saved over $10 on gas when I filled up my gas tank (you get so much off per liter of gas depending upon how much you spend at Sobeys and you may add up these coupons over time to get the best impact).

rgray
Jan 18th, 2010, 09:26 AM
......... they give you airmiles, plus................

Just to correct a minor inaccuracy... No business is GIVING anybody anything in these programs. Rest assured the cost of the program is already covered in the price. The don't GIVE anything - you already paid for it. Not to mention the information you are giving them about yourself.

Dr.G.
Jan 18th, 2010, 09:29 AM
Just to correct a minor inaccuracy... No business is GIVING anybody anything in these programs. Rest assured the cost of the program is already covered in the price. The don't GIVE anything - you already paid for it. Not to mention the information you are giving them about yourself.

A valid point, rgray. However, I keep track of the prices of items we buy each week, and buy them when they are on sale. This is the one way we are able to keep the price of food down somewhat. Still, I buy food at Sobeys and save on both gas and food, since I only cash in my AirMiles points on Sobeys vouchers, rather than on things we don't need.

MLeh
Jan 18th, 2010, 10:13 AM
How about the use of rewards cards such as Airmiles?

Thoughts, and comments please.

As long as you pay your credit cards off in full each and every month, loyalty programs are fine. (Some people prefer the cash-back type cards though. It depends if the loyalty program has the products/services you will use.)

However, you shouldn't buy things you don't need 'just to get the points', and keep in mind that sometimes on major purchases you can negotiate a lower price if you don't use a credit card.

This year for Christmas I used Airmiles for all the gifts I gave.

Dr.G.
Jan 18th, 2010, 10:16 AM
As long as you pay your credit cards off in full each and every month, loyalty programs are fine. (Some people prefer the cash-back type cards though. It depends if the loyalty program has the products/services you will use.)

However, you shouldn't buy things you don't need 'just to get the points', and keep in mind that sometimes on major purchases you can negotiate a lower price if you don't use a credit card.

This year for Christmas I used Airmiles for all the gifts I gave.

You raise two important points, MLeh, namely not paying interest on credit card balances (which are outlandish and verge on the criminal), and the idea of negotiating lower prices when paying cash.

MazterCBlazter
Jan 18th, 2010, 11:15 PM
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mrjimmy
Jan 19th, 2010, 09:40 AM
A few guidelines I follow:

Try not to buy new. Hundreds if not thousands can be saved by buying something even a few months old.

Pay off credit balances. Paying interest is throwing money away. Try getting that much on any of your investments. If you can't pay it off monthly, get a low interest card and transfer your balance(s) to it.

Always look for a better deal. I spend a couple of hours a year on the phone with my insurance company, Bell Canada, Rogers and my cell providor. I always walk away with substantial savings.

Avoid bank service charges. These can add up to a small fortune. Banks want your business, take advantage of that.

Don't buy your groceries at the expensive store. Small shops and 24 hour stores usually charge a hefty premium of food. Take a bit of time and do your shopping at a larger store that promotes lower prices. You'll be surprised how much you can save.

Make your money work for you. Don't leave any savings languishing in low interest paying accounts.

Always have a budget in mind. Be aware of how much you have, how much things cost and how much you've spent. Don't get sideswiped by the old 'how did that happen?'

Shop Around. There's always a better deal. Although you need to find the balance between time spent looking and money saved.

These are just a few I think about.

FeXL
Jan 19th, 2010, 09:46 AM
Got me a big, old glass jar fulla pennies...

chasMac
Jan 19th, 2010, 09:59 AM
To add to some of the above guidelines:

Forget about any mis-guided principles you may have and shop at wal-mart. Try especially to pick up any items in the food section that you would normally get from your local supermarket; like milk, eggs, butter, juice and dried goods. Much cheaper.

eMacMan
Jan 19th, 2010, 11:20 AM
To add to some of the above guidelines:

Forget about any mis-guided principles you may have and shop at wal-mart. Try especially to pick up any items in the food section that you would normally get from your local supermarket; like milk, eggs, butter, juice and dried goods. Much cheaper.

For us the only savings that come close to paying for the extra gas are:
Paper goods (SuperStore is better but further away)
Juices
Honey & Peanut Butter
Breakfast Cereal (which we no longer buy)

Other stuff may or may not be cheaper depending on who has what on sale. OTH WallyWorld shaves a few pennies per item by not maintaining the massive individual customer databases that go with shopping at Safeway and some of the other grocery chains.

eMacMan
Jan 19th, 2010, 11:22 AM
No debt, no credit/debit cards.

MazterCBlazter
Jan 24th, 2010, 01:37 PM
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janice
Jan 24th, 2010, 09:03 PM
Check out this free app for the iPhone, full of exclusive savings for CAA members.

New CAA iPhone Application Helps Members Find Savings Everywhere (http://www.marketwire.com/press-release/New-CAA-iPhone-Application-Helps-Members-Find-Savings-Everywhere-1084227.htm)

MazterCBlazter
Jan 24th, 2010, 11:22 PM
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janice
Jan 25th, 2010, 01:38 AM
Membership might not be free but for those that decide to purchase a membership or already have one it is useful to be aware of where you can save.

I have a membership as an "insurance" in case I get stuck on the road and it has come in handy. To me I already have a membership and this is just a way for me to get more value out of it. I have probably save equal or more then my membership cost in a year.

I figure take the discounts and airmiles companies are willing to give you. It's better then nothing and most of that spending your going to do regardless so why not shop at the places that are willing to give discounts or airmiles.

MazterCBlazter
Mar 20th, 2010, 03:19 AM
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daddymac
Mar 22nd, 2010, 10:47 AM
my wife gives me an allowance.

hahaha.