Easy Money by Gail Vaz-Oxlade

Author:Gail Vaz-Oxlade
Language: eng
Format: epub
ISBN: 9781926583549
Publisher: Grass Roots Press

CHAPTER 6

Save Something!

Everybody needs to learn to set aside some money for the future. Are you trying to build up a just-in-case fund? Are you saving for when you stop working completely? If not, why not?

Many people are not concerned about saving. They’re just trying to make it to the end of the week, never mind the end of month, before they get to the end of the money. They don’t have any real sense of how important saving is. And they can’t stop spending long enough to set something aside for the future.

The government has given us a couple of great ways to save for the future. Using RRSPs and/or TFSAs, can help you save money and save on taxes.

RRSPs

An RRSP, or Registered Retirement Savings Plan, is a great way to save for retirement. Money put into an RRSP is taken off your income, so you don’t have to pay tax on it. That means many people get a tax refund when they put money into an RRSP. Money earned inside an RRSP also isn’t taxed, so your savings can grow faster. You only have to pay tax on the money when you take it out of the RRSP.

TFSAs

A Tax-Free Savings Account, or TFSA, is like an RRSP because the money you earn in the plan isn’t taxed. However, unlike an RRSP, you never have to pay tax, not even when you take money out of the TFSA. But you also do not get a tax deduction for putting money into the TFSA, so there’s no tax refund.

Everyone Can Save

If you tell me you can’t find money for saving I’ll tell you, “I don’t believe you. Not even $1 a week?” I think if you put your mind to it, and if you really, really want to save, you can.

Money leaps out of our wallets every day. There are lots of ways to cut back, just a little, so that you can have the things you enjoy while saving money, too. Planning ahead and being thoughtful about what you’re buying can save you money big-time.

If you work about 240 days a year, and you’re buying fancy coffee every workday and paying $4.75 each time, that’s $1,140 a year. That’s a lot of money. But you don’t have to give up your fix completely. Switch your caffeine dealer or sip smaller and send the rest to your emergency fund.

Taking lunch to work instead of buying lunch can be a great way to save. If you spend $7.50 for lunch at work each day, that’s $1,800 a year. Packing a homemade sandwich will not only help your wallet, it can be healthier, too.

Smoking a pack a day eats up about $3,650 a year. Ordering in pizza to avoid cooking after you finally get home from shopping with the kids will gobble about $850 of your income. Spending money on conveniences and pleasures without giving it a second thought is a very expensive habit.

Get Started Saving

If you want to save, the most important thing is to get started.

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