Money management is a lifetime habit, not a short-term routine change. It takes effort to track where your money comes from — and even more effort to see where it disappears. You work hard, so you deserve to enjoy every dollar. But when unexpected life events require you to spend even more, your money management skills are tested.
So how do you save more money for your goals while also preparing for the unexpected? The answer breaks down into two obvious parts.
Control Your Spending
Your total savings depends on your spending. If you spend majority of your paycheque on take-out food, online shopping, and unique activities, you will never reach your goals. You won’t increase your savings by setting aside whatever remains of your paycheque at the end of the month. If you instead grocery shop, limit purchases, and opt for free activities, you will save more.
If you spend less money, you will save more money.
To be clear, I’ll never say you should stop spending money on optional items. It’s unrealistic. Instead, you should spend your money carefully. Be deliberate with your purchases. If you want to see your favourite band in concert, then go. You shouldn’t miss it. If those tickets cost a lot, you need to sacrifice somewhere else to make up for the cost.
But what if your sacrifice isn’t enough to cover the ticket prices? That ties into our second part of saving.
Earn More Money
A key step to saving more money is earning more money. It sounds obvious to say, but I want to reframe how you interpret common saving advice. When people say you should “save your money,” they also think you should make more money.
Look at it this way:
If you save a thousand pennies, you end up with ten dollars. That doesn’t buy a lot.
If you save a thousand loonies, you end with one thousand dollars. That a huge difference in buying power.
To earn more, you need to invest in yourself and your future. It takes time to increase your earnings or salary, so this step often comes later in life.
Start Right Now
When you combine controlled spending and increased earnings, then you start to save a lot more money. The two-pronged approach doesn’t always happen at the same time, so focus on your spending to start.
Regardless of your financial status, everyone can learn how to save money in Canada. Like any other skill, controlled spending requires practice and creativity.
This week, track every dollar you spend. This activity is not about personal judgement, but to see where your money actually goes.
When you come back to this blog, you will find ways to hone this life-long skill and extract the most value from your money. Personal budgeting tips for Canadians start here.
Money Method Tip: Whenever you’re about to buy something, think about if you already have something similar.
