General money saving tips all Canadians should follow

General money saving tips all Canadians should follow

Posted on September 27, 2022

Canadians are feeling the financial strain caused by rampant inflation, so we are going to show you some money-saving strategies that will help you when it comes time to buy a new house or car.

Don’t worry; we aren’t going to give you “pie in the sky” scenarios or tips for the independently wealthy; these suggestions apply to everyone.

Reduce your tax liabilities

If you are like most Canadians who work a job where your taxes are deducted directly from payroll, you should sign up for an RRSP at work.

Most employers have an RRSP matching program where they will match dollar for dollar up to a specific amount.

By having these payments made at payroll, you don’t feel the pain you would if you had to allocate the funds from your bank account into an RRSP.

The benefit of these extra RRSP payments is you will get a bigger tax refund which can be used as a lump sum down payment for a car, house or can be used to pay down existing debts you are carrying.

Paying down debts (the snowball effect)

Interest rates are rising, and that is weighing down the Canadian economy, imagine how life would be if you didn’t have to give such a large portion of your income to your creditors!

Make a list of all of your debts from smallest to largest. Once you have that list in place, you can start applying the debt snowball; on your smallest debt, allocate every additional dollar you have available in your budget while still paying the minimum amounts on the other debts you have.

By paying more than the minimum, you should be able to clear away the smallest debt in a few months.

Once that small debt has been paid in full, use the payment that was allocated to the smallest debt and apply it to the next smallest debt.

This “snowball effect” will help you eliminate your smaller debts and free up cash which then can go towards your largest obligations until you are debt free.

If you are not able to find additional cash in your budget for the debt snowball, the following tips will help.

How to free up cash in your budget

Start by listing all of your streaming services; during the pandemic, most of us were forced to stay indoors and watch a considerable amount of TV.

There is a good chance you are subscribing to streaming services that you no longer use or even need. The money that was going to these services can be used in your debt snowball exercise.

Along with cutting these services, if you are paying for cable TV, now would be a great time to “cut the cord” since most Canadians stream their content anyways.

By following these simple tips, you will be able to save money and get out of debt in the process.

When you’re ready for a car lease or loan, get in touch with the auto loan experts at Northway Ford for great deals on auto finance.