How to Save Money: 25 Top Money Saving Tips – Rank-It.ca (2024)

For this guide, we listed the 25+ best ways to save money considering realistic situations so you can successfully start making smarter financial decisions.

Money can’t buy happiness. However, not having enough money is one of the biggest stressors for Canadians. A 2020 report for the Canadian Payroll Association stated that 43% of Canadians are financially stressed, while only 22% consider themselves comfortable.

While everyone could use araise to help them build savings, this might not be likely for all.Learning financial literacy andbuilding up your own savings on the other hand can be all up to you. It can be hard, but we all need to start somewhere. For more money related articles, check out our Finance section on our site!

Saving money can get youwhereyou want to be in life.Whether you want to own your own home,go on a dream vacation, or retire one day,saving moneycan help you get there.Many of these things are way too expensive to accomplish onshort term savings, and unless you are fortunate enough to makealargeamount of money,you will need to worktowards these goals for a while beforebeing able tobe able to accomplish them financially.

Beyond that, emergency savings is a very important thing to have just in case. Savings can help you urgently get you out of a desperate situation, helps you avoid taking on debt, and gives you a greater sense of financial freedom.

According to 2019’s BDO Canada Affordability Index, 53% of Canadians live paycheque to paycheque. A survey from the Canadian Payroll Association in 2020 report 37% of Canadians living paycheque to paycheque. Regardless what the number really is, it is clear that many Canadians are struggling when it comes to saving money.

1.Set up a budget and know where your money goes

If your money seems to come and go, you likely need to reassess your spending habits.Small daily purchases add up, and the amount you spend on smaller purchases, or things you do not need, can be significant.

What works for many is to set up a monthly budget, accounting for your needs, like rent or mortgage, consistent bill payments, and groceries, as well as a budget for things you might not need, but want. Ideally,you want to leave a good amount of your income to go into your savings. We recommend looking into the 50/30/20 rule as a solid basis to start your budget– allocating 50% of yourafter-taxincome on your needs, 30% on your wants, and 20% on savings.

How to keep track of it all? Manylook to keeping spreadsheets like Microsoft Excel orGoogleSheets,however for a more complete experience,you can look into apps likeYNABorGoodbudget– a subscription based and free budgeting app, respectively.

2. Open a Tax-Free Savings Account (TFSA)

Tax-free savings accounts are tax exempt accounts with a name that is a little bit of a misnomer, since they are an investment vehicle that can holdnot only saved money, butbonds, stocks, mutual funds, exchange traded funds, and more inside.Being tax-exempt means thatyou can investyour post-tax money into it, and not have to pay additional tax on any gains that you will see in your account.Since gains on investment returns are typically treated as income, you can pay significant tax on these gainsin other types of accounts that can hold investments. Using a TFSAmakes sense for manylow-incomeearners to invest, especially if you expect toearn more down the line. TFSA’s also make sense if you will need to withdraw money beforea set date, like when you plan on retiring, or for storing in the short term.Just be wary ofmaximum contributions– if you have never contributed to a TFSA and have lived in Canada since you were 18, then your limit is $52,000. Each year, you get approximately $6,000 more room to put in your TFSA. If you exceed this, you might expect a call from the CRA.

Infographic: Cost Cutting Tips (Infographic: Rank-it.ca)

3. Automate your savings

Once your paycheque has made its way into your chequing account, one of the biggest enemies of your savings is surprising: its you. Some people are prone to impulse purchases (myself especially). Automating your savings removes this factor from your savings, while simultaneously allowing you to worry about your finances less.

So how does it work? Your financial institutionlikely willhavethe ability to set upautomatictransfers and deposits into your accounts.You can do this any way you want, but a recommended framework to work in is as follows.

First, if you have an employer retirement account,some money from your paycheque will likely come out of your account. If not, and your employer offers this option, you should take that up.When your paycheque then deposits into your chequing account, you can then set it up to automatically send money to other accounts for your savings accounts and investment accounts.Most often, you willchoose a sum for any automatic transaction you authorize.You can set up bill pay through your financial institutionstopay rent or any billstoo.Billpaytakes a cheque from your account and sends it over to yourlandlord or anyone else you canpay via cheque.

4. Start investing using robo-advisors

Let’s say you have an emergency fund accumulated, and you want to make your money work for you to potentiallyacquire more money.There are many ways you can begin to investyour extra money, but one of the easiest is using arobo-advisor.Robo-advisors areautomated, allowing you to sit back and just deposit money regularly, andideally, your savings will grow.

Sincerobo-advisors are programs, the fees attached torobo-advisors aremodest, compared to similar servicesvia banks.You can save that fee bymanually doing all your investing, but for an easy investing strategy that can and typically does outperform active investing done by major banks,robo-advisors have established their place in the investing worldand are not going anywhere soon.

We wrote a list of the top Robo-advisors and their associated fees.

5. Pay off debt

Paying off debt may hurt your savings in the short term, but long term, it is a very smart idea. Since debts will grow bigger as they accrue interest, paying off any debts you may have should be one of the first things you consider on your journey to financial responsibility. Too many debts to pay off at once? Financial advisors typically advise “the snowball method,” where you pay off the smaller or high-interest debts in full before tackling the largest debts and ascending to the next lowest debt after each is paid off in full. This lets you reduce the amount of sources you are paying interest on, and in many situations lessen your overall debt. However, this rule does not apply to all situations, and it is worth doing the calculations yourself or getting a professional to help figure what debt repayment strategy is right for you.

6. Compare prices and rates using appsand online services

Your monthly bills and expenses are an unfortunate fact of life, but you can likely save some extra money if you know where to look. For your residential energy needs,EnergyRates.cais a non-biased energy comparison website dedicated to saving youthe most money on your energy bills.PlanHubfinds you the cheapestphone bill for what you need.Gasbuddyis a website that compares local gas pricesand lets you easilysave moneyongaswithout goingtoo far out of your way.You can also lookforbrokers for insurance, mortgages and moreonline as well.

7. Get a side gig

It is kind of obviousthat you cansee more savings from increasing your income, however for many people, getting a second job is notin the cards. Whether you have kids or pets that you need to take care of, have outside commitments, orwant to maintain your work/lifebalance, itis understandable that you do not want toget a second or third job.

However, thereis a myriad of ways to add supplemental income.You can look online tofill out surveys onswagbucks,completeartistic tasks for others onfiverr,sell crafts onEtsy.Car owners cansign up forSkipTheDishesfor food deliveriesorUberfor both food deliveryorride sharing.You can takedogs for a walkonRover. There are simply many ways thatyou canturn your skills into extra income online.

8. Stop paying unnecessary fees

There are many financial products offered bythe bigbanks, includingmanydifferent bank accounts,creditand debit cards, and more. However, there are a lot of fees and charges associated with many of these services, that is eating into your savings. More online banks likeTangerinehave popped up with a business model that trades the convenience ofbrick-and-mortarlocations of the big banks with an online-only experience that skips the fees.

This goes for your credit card too. Some credit cards have fees, so you might consider switching to a no-fee credit card. You can alsolook intoa credit card that has fees, but a worthwhile cash back or rewards program, so your credit card use can earn you money back.

9. Cancel unnecessary subscription services and memberships

How many streaming services do you have? Have you signed up for any subscriptionserviceson a promotional deal, only tobe charged when the promotional period has ended?Keeping on top of your subscriptions and memberships can keep your monthly and yearlybillslow andwill not surprise you when checking your credit card statement.

One of the best ways to keep on top of yoursubscriptions and memberships is by scanning your credit cards and keep track of them. Think about if you really need eachsubscription andcancel those you do not need.

10. Cut your cable (really!)

Adding on to the last point, you can save a lot of moneyby getting rid of cable in lieu ofstreaming services and other online content.

11. Sell unwanted items

There are manyitems in your house that are worth money,as long asyou find a buyer. With sites like Kijiji andFacebook Marketplace, youcanpotentiallyfind buyers for your unwanted itemsquickly.

Of course, not everything you own willbe valuable,and you might not necessarily find a buyer.Some things will have more liquid value than others.Items in ideal conditionswith value, like furniture, clothes,electronicsand collectables might find buyers quicker than other items you might be looking to sell. If you have collected a lot ofitems, you can consider holding a garage sale, if laws in your area permit it.

12. Reduce household costs

One oftheneedsyouhavetoaccount foreach month are household costs.These need to be paid beforeyou can put any money away for your savings.Utilitiesmay be included in your rentcosts,or you may be responsible for paying each off individually.Other monthly costs, like food and cleaning products, canadd into theequation. Ifyou do not have enoughmoneyafterpaying off the essentialhousehold costseach month, you might seriously need to consider reducing these costs.Things you can do to reduce these household costs include:

• Shop around forthe cheapest utilities, if able.
• Anothergoodway tosave money on household costs is to make better use of your utilities.Save on electricity bills byturning off lightsand unplug electronicswhen not in use,take shorter showersand use less water,and throw on a sweaterinstead of turning up the thermostat.

• Eat smarter and reduce food waste. Food waste is one of the biggest problems of our modern world. According to Waste Reduction Week, the average Canadian householdwastes $1,766 infood waste each year.If you can prevent food waste byfreezing, vacuum sealing, reusing leftovers,andoverall beingmore cognitive of your food waste can save you big money.

13. Thrift your clothes

Buying name brand clothes of the rack can be an expensive price to look good, and more affordable fashion retailers that dabble in fast fashion have a huge environmental impact.Thrift shopping for your outfits is a cheaper, andoverallmore environmentally conscious way tofill your closet.You are likely to find a wide selection of clothes, in a wide range of styles, all for an affordable price. You might need to spend some time looking for the perfect outfit,since there will be a lot of clothing you will not want, but the diamond in the rough exists. Don’t believe me? Ihave founda pair ofnew Timberland boots–my size–for$15, andfoundperfect fittingLevi jeans in good condition for a similar price.Hit your local Goodwill instead of the mall next time, and you canseesome nice savingsthat you can throw into your savings or investment accounts.

14. Declutter and adopt a more minimalist lifestyle

Anotherlifestyle change that can potentially save you money, decluttering and moving toward minimalism might bea big change that could save you money.This change in lifestyle can refocushow you organize yourhome, improveyour finances, andchange your outlook on consumerism and spending. However, the savingsimpactyou can see from this tip might be less immediate.

There are some immediate benefits that taking on this lifestyle could have.

With less items in your home, the less storage space you will have, meaning you can spend less on shelving units and storage containers. With less items, you could potentially downsize your living space if you rent, reducing costs which makes frugal living in Canada easier. The biggest item of note with this lifestyle change is that you will ideally be less obligated to buy unnecessary items that you do not need.

15. Invest in online education and expand your skillset for a low cost

Anotherthing you can do to boost your savingsby boosting your wage, learning new skillsand educationcan help youwork towards a higher paying job.

Khan Academy,TED-Ed,orCodeacademyare all ways foryou toboost your knowledge basefor free.These sites employ videos with experts ondifferenttopics, althoughCodeacademyis primarilyfor learning coding.Masterclass,SkillshareandUdemy are paid services that primarily use videos to teach a broad range of topics, with knowledgeable experts teaching the course – with Masterclass including lessons from working professionals and celebrities you are sure to know. Additionally, almost all universities will have online courses available, which while costing significantly more money, overall looks better on a resume.

16. Use public transport more often or ride a bike

Car payments, insurance, gas, and regular maintenance are a handful of expenses related to owning and using a motor vehicle. While a car is essential for the livelihood for many Canadians, many Canadians are realizing that vehicles are increasingly unecessary. If you can, using public transport, or alternatives like riding a bike or walking, can save on your gas bill. Even better, if you can skip on driving to work everyday, you can also get a more advantageous rate on your monthly insurance.

Infographic: How to start saving money (Infographic: Rank-it.ca)

See Also

55 Realistic Ways to Save Money in Canada for 2024

17. Start using a money-saving browser extensions

When shopping online, there aremany applications or browser extensionsthat can help you save on your purchases.These are some of our favourite apps or browser extensions that do just that.

• Amazon Assistant– Amazon Assistant is a browser extension thatoffers new deals daily, on top of a host of features like 30-Day Price Trackerwhich lets you save even more.

• Honey– Honey is afreebrowser extension thatautomatically searches for coupon codes for each site you are on and applies the code with the biggest savings.
• Rakuten– Rakuten is afreebrowserextensionand app that allows you to earncash back on your purchases fromstoresites.

18. Cutdown oneveryday expenses, likemakingyour own coffee

Youmayhave heard out-of-touch financial analystsbemoan millennial financial insecuritywith expressions like“stop eating avocado toastorbuying expensive lattes.”

Even if this feels like alow blow considering increasing wealth inequalities andaexorbitant housing market,there is some truth to it if you want to savesome extra cash. While getting thatgrandevanilla latte can be a great way to start yourmorning, it can add up–to our calculations,approximately $1037.50 per year!Making coffee at home can be an easy way to save money, and even if you want a specialty drink,a machine that can do it allcan feasibly cost you less than one year of Starbucks coffee andaround five minutes each morning.

Maybe you do not drink coffee every morning, but thesame principlemay still apply to you. Look at your day-to-day and think about any everyday expenses you make that you could cut down on. Maybe you buy lunchwhen you are in theoffice, orstop by the vending machine each afternoon.Whatever it may be,if you can do it at home, you can likely do it for cheaper.

Cutting down on small,everyday purchases will not be enough tomake you rich.But it could be one step on your way to financial freedom.

19. Plan your meals and avoid eating out

Eating out is expensive.Whethertreating yourself toofrequently, orordering pizzabecause you do not feel like cooking after work,the urge to order take out or dining in is all too real.Cooking at home is one of the easiest ways to save money,but you might also spend more than you would expect if youarenot smart about your eating habits.Planning mealsaheadallowsyou to buy food that you need, as well asbuying the right perishables like meats and vegetablesso you can use them before they expire.Buying in bulk can save youmoney butbe prepared to eat a lot of the same foods or storethe remaining foodin the freezer. Minimizing food waste can be an exceptional way to save money, but it requires planning and foresight.

20. Don’t be shy and ask for a discount

The worst thing that they can say is “no”. The best thing they can say is ok and you save more money.Bartering isanage-old method of trade that is more common than you might realize worldwide. While many times, barteringmightbeimpossible for the worker you are interacting with (and you shouldkeep this in mind),but forsome objectsand businesses, this is a real tacticthat can save you money.

21. Search for “free” entertainment

Canadians spend a lot of money on entertainment.While going out to see live music,going to the movie theatre, orbuying that new hyped game can be great ways to pass your time, but they canbe expensive.Instead, you can consider spending your free time on something cheaper – or potentially free. Look for free trialsor discounts for streamingservices andkeep the amount you have at one time to a smaller number.Your local library has more than just books, and you can borrow movies and full TV seasons from the library for free.YouTube has an endless amount of free video content, with everything from documentaries, comedy, or even full moviesif you know where to look.You can alsolook intoother methods of cheap or free entertainment –includingpick up a board game from a thrift shop, do crosswords or other word games,play cards,orplay games on your browser.

22. Embrace DIY

Do you have any minor vehicle repairs you have been putting offbecause you do not have the money? What about house repairs?Maybe you have plans for improving your backyard but did not have the funds to complete.

Going to a mechanic or hiring a contractor respectively can be expensive endeavors, soif you have small repairs you need to do, doing it yourself is an excellent way to savemoney.If you are nothandy, orhave no ideahow tofix what needs fixing, you can look online for resources, as there are plenty of how-to guides that are available for free online.However, not everything is advisable for you to fix, and if things go wrong, could lead to larger billsdown the line. For newbies approaching a DIY repair project, we suggest doing research before picking up a wrench or screwdriver.

23. Spend less at the grocery store

When grocery shopping for the week, consider the store brand over the name brand to save some money, orjustlook for the cheapest optionsfor each itemat the grocery store.While it might only be afew cents per item, it can add up.

Another thing that you can considersaving money on groceriesisbyeating cheaperfoods. Meat and fish can bedelicious, healthy choices, but are expensive options. Eating vegetarian once or twiceper week can see significantsavingson your grocery bills.

24. Pay more now to save money later

Many things on the low end of the price spectrum may not have the quality compared to more expensive counterparts.Fromanything from shoes to appliances, the cheapest option up front might not be the cheapest option in the long term.

With simplerproductslike shoesthat are expected to wear out, durability is a key element to think about in terms of getting the most out of your money.With larger purchases,durability still rings true, but other factors can be significant as well, like energy efficiency.Spending more for an energy efficient model of an appliance or other product can save you more money on energy costs than the differencebetween the cheapest version of that product.

25. Work on your self-control and stick to your plan

Think about your goal. This might be the hardest step for some people, but you will struggle to save money if you do not exercise self control. Keep your goals in mind: whether saving up for a house, car, vacation, or retirement, you will likely want to achieve these goals more than buying that impulse purchase. If you have created a budget to help you build your savings, sticking to the plan as much as possible might be hard, but it will be worthwhile in the long run.

How much money should I have saved by age 30?

Theamount of moneyyou save up over your lifewill vary on so many factors – your goals, your work history and income,events in your life and the economy, and so much more.Not being on track on the following sections is okay; these are merely guidelines.

A common sentimentis that you should have one year’s salary saved up by 30, to be on track for your retirement.

How much money should I have saved by age 40?

By age 40,these same financial advisors recommend you haveapproximatelythree times your income saved.

How much money should I have saved by age 50?

By age 50, financial advisorsrecommend you havearoundsix times your income saved.

How to save money for travel?

Saving money for travel is in a sense harder than saving up for a home or retirement, due to the typically short-term timeframe most travel is planned for, and a lack of resources that are designed to help you save up for travelcomparatively. The most important thing you can do to save up for travel is being financially responsible and actively saving money. Track your spending, removing unnecessary purchases from the equation and try to find frugal alternatives.You should plan well in advance what you need to save for your trip, so you know what measures you will need to take to save up for that dream vacation.

How much of my paycheck should I save?

The number seems to be around 20%.If you can save more, then that isgreat,and you should consider saving more.However, saving 20% of your paycheques puts you well ahead of the curve.No matter where you are in life,planning aheadis

Are there any apps that help you save money?

There are tonnes!Dependingon how you want to save money, there is anappdesignedfor it.

Some of our favourites include:

YNABandGoodbudget– Budgeting apps that let you visualize and plan your monthly expenses.

KOHO–essentially a pre-paid credit card you can put your spending money into each month,that offers both intereston money in your accountandcash backon your purchases.

Rakuten&Honey– browser extensions / apps that help you save money when you shop online.

Saving money vs. borrowing for a large purchase: Which one is better?

Typically, it makes sense to be able to pay off a purchase outright with money you have, rather than take out a loan or use credit.Large purchases can take time to pay off, and you might be hit with large interest rates on the loan or line of credit you used. However, there can be times where it is advantageous to use a loan or line of credit on a large purchase. For example, you might see a discount on an item you are looking for, and the discount exceeds the amount you will have to pay in interest. Or maybe the purchase you will make is likely toappreciate in value. You can also justify borrowingif you need to make a purchase, like if an appliance in your home breaks down. Overall, it is recommended youborrow what you can realistically pay off quickly to avoid paying more than you need to on the dreaded interest, but there aresometimeswhere it might be the smart decision to borrow for that large purchase – we do it for cars and homes after all.

How to save money and not spend it?

The most importantthing to do to save money is to make the effort to save. If you don’t make the effort yourself,you will struggle to save.There are other methods that you can also use to help you save.Ifyou tuck your money away into a savings vehicle, it may be less tempting or even harder tospend it.You can put your money into anETF, ashort-termbond,high-interestortax-freesavings accounts.If you do not see this money in your account and are readily available, you will be less likely to spend it.

What is the 50/30/20 rule?

In her book “All your Worth: The Ultimate Lifetime Money Plan,” US Senator Elizabeth Warren proposes one such way that you can budget effectively.The 50/30/20 rule splits up your after-tax income into 50% allocations into things that you need, 30% allocation into things that you want, and 20% allocation into savings.

Needs are defined as things you need for living, and non-optional financial obligations.These include rent or mortgage payments, utilities, groceries, and non-optional payments like insurance or healthcare. Going above that on your weekly payments means you might be living above your means.

30%on yourwants apply to things you want but you can go without: dining out, non-necessary shopping, events like concerts and vacations, and whatever you want to buy that you cannot justify as being a need.

That leaves 20% of your income to go into your savings, whether that be in a high-interest savings account, IRA contributions, mutual funds, ETF investments, or just emergency savings.

Is the 50/30/20 rule for everyone?

Ultimately, the 50/30/20 should not be used as a rule, but more so as a guideline. Life can throw unsuspecting curveballs at you and having financial flexibility can be important. The costs of your needs may vary, and while hitting the 20% savings target should be a goal you reach monthly, the other two categories are more guidelines.

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