Super saving tips from super savers
I recently checked out this advice from some super savers, including some tips from my friend Justin Bouchard from this well-known personal finance site. After reviewing the article I thought – how well do I follow these tips?
I wrote about it and now I know…
On budget busters
I don’t pick up my “favourite latte on the way to work” as Ms. Walkington, the money coach interviewed in the article, suggests you avoid. So, point for us there I guess. We make our own coffee and drink it at home.
Far beyond coffees and lattes, dining out is one of the biggest budget busters out there but we actually do dine out every now and again. Why? Because we like it. When do we do it? After we pay ourselves first of course. We believe this is a better way to budget. This way after we pay ourselves first we pretty much spend whatever we want from there and enjoy our life.
On goal setting
I think we’re very realistic with our retirement goals – although it’s taken a LONG time to get to where we are and we have more work to do. We do, as Mr. Nolan (an advisor from the article) suggests: we break our financial goals into manageable segments. You can see an example of that over the years here.
On making plans
“To be a “super saver,” you’d better be a super planner.”
We try and do that often.
We don’t have a % savings target for each month. Instead, we strive to max out our TFSAs every year (done for 2018) and we’re working on maxing out our RRSPs as well (my account is now full; working on my wife’s outstanding contribution room.) After that we focus on killing debt – making more than our minimum mortgage payment. That’s about it. Like I mentioned above, we save first and then spend some money that is leftover.
On investing wisely
I agree with what my friend Justin contributed to the article – cut back on fees. If you use a robo-advisor, “…you can go down to 0.5 per cent.” Good advice. For new investors or seasoned investors alike, if you want to cut your costs AND get some helpful portfolio advice consider these partnerships and deals to SAVE BIG.
On paying off credit cards – every month
Done. Otherwise, I wouldn’t own one because you are spending money you don’t have.
On negotiating fixed costs
We use a mortgage broker to help us get a great rate on borrowing costs. Actually, here are some mortgage tips for all ages.
I don’t switch up my cell phone plan very often because I have a good, grandfathered rate plan – I pay about $55 per month for unlimited Canada-wide talk, text and 3 GB of data. I like using my data whenever I want so going without data isn’t really worth it for me.
On sharing a car
Total fail on this one but we do own both of our cars. Maybe we get partial points on this one since we have no car payment (and haven’t had one in many years) and we carpool as often as we can to keep gas, maintenance and wear-and-tear costs on either vehicle down. Keeping two cars is temporary though. We will be moving in two years and we’ll go down to one car in the city. We estimate that owing one car (vs. two) should save us about $300 per month.
On building tax-free savings accounts
Already there Mr. Nolan we use “tax-free accounts for the long-term future, not the short-term, because the real power of tax-free savings accounts is in the compounding tax-free growth.” We’ve used our TFSAs as a retirement account pretty much from Day 1. I would suggest you should do the same!
Overall, good tips for many Canadians to take advantage of. If you want more insight on how to become wealthy, consider this self-made millionaire assessment guide.
What do you make of these tips? Anything else you’d suggest? Anything else you did to become the super saver that you are?
I’ve recently realized that I’m pretty maxed out on monthly contributions and repayments. In order to continue working toward a full portfolio, I’m trying to get ahead of my loans by paying my monthly cotributions forward with an income fund. Sooo… my savings for major purchases is through the income fund. I am investing the dividend. I’m in a contest with myself to increase my monthly dividend return. I will pay cash for my next vehicle for example and will be rewarded along the way. Also for trips, renovations, and annual expenses.
From KC – accidentally caught in spam KC! Sorry about that:
I wouldn’t call myself a super saver until I added up all the savings and I guess I am. I do eat out a couple of times a week but I choose my low-cost healthy places (like Pita or subway). I currently put away 31% towards my retirement savings (RRSP, RDSP, and TFSA but it’s going to be a while before I max out) largely due to playing catch-up as well as setting aside monies per month towards future downpayment. However, I still try to make sure that I enjoy life whether it’s a spontaneous roadtrip to a nearby festival or just eating out. Life’s too short to scrimp and save all the time. I just make sure that my fixed expenses and paying myself first is taken care of before that happens.
I’m a saver. I saved so I can retire early. Shortly after we got married, my husband indicated that his life goal isn’t to retire early cause he doesn’t want to sacrifice a good quality of life now. That’s when I decided early on in the marriage that my husband’s salary will cover all our living expenses, our primary house mortgage, his RRSPs/TFSAs and RESPs. My salary will be used for my RRSPs/TFSAs, prepayments to our primary house mortgage and pure savings used for investments. Since I have always wanted to retire early (and be a stay at home Mom) and I made clear from day one so I aggressively saved throughout my 21 working years. Hence, we practiced what I was repeatedly taught at home when I was young, in a dual income family, spend from one salary and save the other salary. That’s how we were able to pay off our primary house mortgage relatively quickly and have enough in our investments for me to retire early and be a stay at home Mom. My husband wasn’t taught this growing up. He never paid attention to how much we saved (cause he was busy spending? hahahahaha, actually he never asked so I nevered tallied up our complete net worth). Busy with work, kids and side investments so figuring out our collective net worth always seemed like such a chore so we never calculated it. He was surprised this strategy worked for us when I told him how much we have saved collectively and over time, after thinking about it for a long time, I told him, “So now I can retire. I’m going to resign from my job.” He is okay with that cause he saw how relentlessly I saved. My husband can retire too if he wants but he won’t cause he has a generous DB plan waiting for him if he hangs another for another 10-15 years, plus he likes his job. It’s hard to walk away from a good DB plan, well it will be good assuming his company won’t be undergoing any massive structural changes in the coming decade (nothing is guaranteed).
I’m going to teach my kids the same thing I was taught growing up (spend from one salary, save the other salary), cause it worked for my husband and I.
VERY hard to walk away from a DB pension, I can relate! To date, we have our finances structured such that my wife works for everyday expenses and essentially my salary is going towards TFSA + RRSP + mortgage paydown every year.
Very well done in your case with kids…”…in a dual income family, spend from one salary and save the other salary. That’s how we were able to pay off our primary house mortgage relatively quickly and have enough in our investments for me to retire early and be a stay at home Mom.”
Well said! Thanks for sharing. I know a lot of people who do not believe in saving for retirement. They just want to spend and enjoy life at the moment. I am a saver like you. My goal is to save and invest wisely and at the same time what is leftover i spend and enjoy the present.
I like a balance myself. Save, invest, and have some fun. Balance is good, at least for us!
My wife and I both came from modest means and so it may have been natural for us to be frugal and thus super savers as you call it. Fortunately we did max our RRSPs, and RESP for our kids. Now, our TFSAs just because it makes money sense. We now do our own investing after we realized the high cost of advisers. In retirement, it’s now is all paying off. Still frugal but at the same time spending to travel and enjoy other of life’s pleasures!
“Still frugal but at the same time spending to travel and enjoy other of life’s pleasures!” That’s living, well done Paul!
I’m not a “super” saver, never was one. I saved to the extent of my maximum RRSP, TFSA and RESP contributions allowed and the minimum into the RDSP to get the full annual government contribution as well as paid off any debt I had. Today I just spent nearly 8K on three back-up power systems for the two houses and the shop. Since they closed the nearby (1/2 mile away) hydro service center, the response times for power outages are now beyond what I’m happy with. I have the $$ and see no reason not to spend it. Of course now that this is done we will never have another power outage. 😉
Why not solar?
That’s extremely impressive Lloyd that you have maxed out RRSP, TFSA and RESP contributions and more. Most folks struggle with maxing out one of those registered accounts.