Spring Saving

Some of us are great at saving, and some of us need to set up an environment that makes it happen without needing to constantly manage our self-control, or repeatedly initiate actions that we’d rather not concern ourselves with.

Know the tools that are available to you!  If you are not the sort of person who enjoys reviewing budgets and transferring money around, speak to your employer or payroll provider about whether you have the option to make contributions to a savings account direct from your payroll.

A savings account attached to your chequing may be convenient, however it’s taxing on willpower when it’s so easy to withdraw from.  There are other savings instruments that have better returns, and are designed for infrequent withdrawals.  Depending on your account and institution, there may be larger fees or a transfer waiting period, which can help you avoid impulse purchases.

If your employer offers a match on a Registered Retirement Savings Plan, think about this as a guaranteed return on investment, before you even need to worry about the performance of the funds you choose.

Get professional advice.  Returns have peaks and troughs. If you have a low risk tolerance, you may be putting undue stress on yourself by choosing a high-risk investment.  Speaking to a qualified professional can assist you to choose funds that work for you, and plan out the path for achieving your financial goals.  Your tax accountant can also provide you with valuable advice on how different account options can benefit you based on your income position.

Get unbiased advice.  Many institutions have qualified financial advisors you can speak with regarding their products.  Take advantage of free services that are available to you; however it is worth considering who is employing this professional.  While it can be valuable to use a free resource, it can also be worth paying a professional who represents you independently of the institution you want to save with.

Whether you are saving a down-payment for a large expense (like a new vehicle or home) or planning for your retirement, it is important that you are taking action.  Lofty savings goals that take a long time can be overwhelming, and it’s tempting to take seemingly small withdrawals whenever you make progress.  Find out which resources are available to you, get advice that fits your style, and take action!

Ashleigh McLerie / Employee Administrator / PEO Canada

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