3.1.7 Video: Why you should save and how

Introduction

We think about things we want in the future: an education, a renovated kitchen, a new car. But it's often difficult to see how to get there. In this video, we're going to talk about saving and how saving helps you achieve your goals.

Segment 2: Why Canadians save

Canadians save for many different reasons. Let’s find out more...

What are you saving for?

Why do you save your money?

Segment 3: Why saving is important

Although Canadians save for many different reasons, generally we save because:

Saving gives us security by ensuring we have money for emergencies.

Saving also helps us achieve important goals because most people can’t buy what is important to them unless they save. Like saving for a car or house.

Segment 4: Saving strategy

(voiceover)

To start a savings strategy, write down your savings plan: your goals, the money they will need and a deadline to help you stay on track.

Start as soon as you can. The sooner you start saving, the sooner you’ll reach your objective.

Segment 5: Pay yourself first

One way to make sure you actually do save for those goals is to pay yourself first. That means making a regular contribution to a savings account. The easiest way to do this is to set up an automatic transfer to your savings account each month.

So how much should you save?

As much as you can. Experts say to save at least 10 per cent of your take home pay if you can manage it.

Setting aside money from your income before you spend it on anything else and using only what’s left to pay for other things will help you organize your spending.

If your income goes up, put some of that increase (as much as you can) into your savings. That way, it’ll be easier to put that extra money away before you get used to spending it.

*closes box

Segment 6: Invest wisely

(voiceover)

Investing your money can be an effective way to grow your savings faster. 

The profit you earn on the money you invest will add to your savings.

As your savings grow, think about getting professional advice on how to choose investments that match your investing goals. (Check out the Investing module in Your Financial Toolkit to learn how to get started!*)

Registered Retirement Savings Plans, or RRSPs, (older couple silhouette) and Tax-Free Savings Accounts, or TFSAs are good ways to postpone or reduce the taxes you pay on your savings. (piggy bank)

Registered Education Savings Plans, or RESPs, (graduation hat) are great if you want to save for a child’s education, because the Government of Canada and the provinces of Québec and Alberta will add to your contribution.

Conclusion

Start a savings plan and put money into it on a regular basis. You can often achieve your goals without making major changes to your lifestyle.