Saving and Investing
Rumour has it, the majority of the province has one of these five savings goals—buying a new home, retirement, a vacation, paying off debt or adding to your rainy day fund. The first step to reaching your savings goal is knowing how much you need to save. The second step, and often most difficult, is actually reaching that goal. To help, we’ve compiled a list of a few ideas to get you on your way to achieving your savings goal.
Saving for your first home
Saving for your dream home includes coming up with a down payment. As of April 16, 2024, under the Home Buyer’s Plan (let’s call it HBP for short), you can request to withdraw up to $60,000 from your RRSPs to put towards your first home. For HBP eligibility, you must be using these funds towards the purchase of your first home and have a written agreement to purchase or build this home. You may also be eligible for this program if you are purchasing a home for a relative with a disability.
While you may qualify for this program, it’s important to remember that what you withdraw from your RRSP must be paid back. Under most circumstances, you will have 15 years to pay back what you withdrew under HPB, although you can repay the entire amount at any point during this period.
Saving for retirement
Now let’s say you have already purchased your first home (maybe with a little help from the HPB), but are now looking at putting some of that money back towards your retirement. We know, retirement may seem like a long way away, but to make your money go further, your best bet is to start saving early.
If you have extra space in your home, an extra parking spot in a busy area or even garage space, you may consider renting it out for extra income. With the creation of rental and home share websites and platforms, you now have the option to tap into a vast market of potential income. If you currently rent your home, remember to review your rental agreement before you open your property up for business.
Saving for a vacation
Maybe you’re planning on saving for a smaller ticket item like a vacation. Even though this is usually a shorter term goal versus a house purchase or retirement, the cost of a vacation can add up fast. To help get you to your dream location, have you considered selling some of your extra things that you aren’t using anymore? There are many second-hand websites and apps that make it easier than ever before to post and sell your unused items. Even better, if you find your hunt for items has uncovered multiple treasures, a garage sale is a great option to help you reach your vacation savings goal.
Saving to pay off debt
Debt is easy to accumulate, especially if you are purchasing multiple items that are nice-to-have, not need-to-haves. The good news is those nice-to-haves may have cheaper alternatives. For example, some couples may have access to two cars. While this might be a necessity in some cases, it can also be a huge area for potential savings. By eliminating the monthly payments towards your second vehicle, you will also be eliminating the associated registration fees, insurance payments and the cost of gas.
Although it may take careful planning and involve the occasional use of ride or car-sharing apps, you will see huge cost savings and can put that money directly towards paying your debt.
Saving for a rainy day
Bring water to help save for a rainy day. Yes, you heard us right. Carrying your water bottle around can discourage you from spending money on soda, juice or even that extra coffee. Even better, drinking more water before you eat out may help you feel less hungry and order less when the waiter comes around. If this didn’t persuade you, drinking water can also have multiple health benefits, including keeping you hydrated as you take on that long walk or shopping trip. These water-drinking savings can add up, so we encourage you to add this straight to your rainy day fund.