Many of my friends and family know that I am a regular saver. I ignore most experts recommendations of saving 10% of my after-tax income. I attempt to save 25% each year.
I have been doing this for several years now and every month this money goes partly into a savings account and/or TFSA account. This savings is used for any emergency that may arise (accident or unexpected cost) and I use this as a self-insurance policy. When you save every month a certain percentage you learn to live without having access to that money.
Why I started to save
When I was in my early 20s, I was invited to a wedding but since money was so tight at the time, I could not afford to attend and I did not attend the wedding.
After that moment, I decided that I needed to change my attitude on having enough money for large expenses. I read a few personal finance books and started to move forward. I did not want to have to struggle in the future for a major expense.
I believed the answer was to start saving an amount every month which would leave my checking account automatically. I was basically spending whatever I had or earned. If it was in the bank therefore I would spend it. I would have no way of course to spend the money.
I am happy to say that it did not exactly have a major negative impact on my life. After seeing my net worth increasing (by making wise investments in stocks with my savings), I was quite happy to see the positive change.
Having regular savings gives you peace of mind, because In life you never really know when something is going to go wrong, for example your car breaking down, the washing machine breaking or the need for some improvements to your house.
This makes my life less stressful by having regular saving deposits, as I know that I have the money readily available to remedy most situations.
I would strongly advise other people to commence saving on a regular basis as it has certainly given me a piece of mind.
How to get started
I recommend creating a basic savings account with your bank or an online bank like ING Direct. Make sure that this account does not have any fees attached to it. If you have a regular pay cheque, set aside an amount each pay period that automatically gets deposited from your checking account to your savings account.
At the end of the year, calculate how much you have saved and calculate your savings percentage (how much of your after-tax income you save). As an example, if you saved 15% over an annual basis, I recommend trying to increase this to 18-20%. Find new items from your budget to cut and turn into a saver.
Why do you choose to save money?
This is a guest post by Steven Zussino, President of GroceryAlerts.ca, Canada’s Source for Grocery Deals, canadian coupons, and printable coupons. They share where to find coupons in Canada.