The Value of Saving

Q.1. Why should I save money?

Saving money allows you to buy large items such as a house, a car or to pay for your child’s or grandchildren's education. It also prepares you to handle sudden emergencies and bills. You will also need money in your retirement years and saving before then helps to give you some independence.

Q.2. How can I start to put money away?

Saving is a habit. You must set saving as a priority and develop a budget that will allow you to put money aside on a regular basis. You can make small adjustments to what you do and you will be surprised how quickly things can add up. In all, you could have about five bank accounts to help you organize your savings.

Q.3. What are some tips I might use to save money?

There are a number of things that you can do to start saving money. For example, you can look at how you might reduce your costs around the home by getting a programmable thermostat and making your home more energy efficient. You can also change your shopping habits and become a smarter shopper. Examining and reducing transportation costs will also allow you to save money.

Q.4. When should I start to save?

You should start to save as early as possible. The earlier you start to save the longer your money works for you and with compound interest the savings grow rapidly.

Q.5. How rapidly will my money grow?

This will depend upon how you choose to save your money. Some investments pay more of a return than others but they are usually higher risk investments. You need to know what choice is best for you. Utilizing Tax-Free Savings Accounts in Canada, for example, will allow you to save money without having to pay capital gains tax on the profits your money earns. There is a general Rule of 72 that will tell you how fast your money will double.

Q.6. How do I choose a bank? Is there a difference?

There are many similarities among Canadian banks and other financial institutions but there are also differences. The terms and conditions of the account types vary from institution to institution. There are also differences in services offered and hours of operation. You need to consider what you need from a bank before you select.