It seems like every financial institution is always fighting for you to put your hard earned money in their bank vaults. Because of the increase in competition these days, customers have TONS of choices! Do I go with a good old reliable brick and mortar big bank, a credit union, or an online bank?
For me, it's all about following the interest rates and minimizing the fees. Every institution has their own interest rates for their products, as well as fee structures, bonuses, etc. Most people DO NOT need to go with a bank that charges you fees just so you can be privileged enough to be their customer. If all you usually do is write cheques, pay bills, put money into savings accounts, GICs, etc. you should go out of your way to avoid paying fees for banking.
Most credit unions are fee free, as well as most online banks. This includes cheques, debit transactions, teller transactions, etc.
The big banks usually will make accounts fee free if you keep a large enough sum of money with them (usually $2000+). Any less than that, and they ding you a monthly fee, which is significantly more than any interest you're making from them. You're almost better off shoving your money under a mattress if that's the case!
Depending on how much effort you want to put into saving those extra dollars, you may want to have a combination of institutions. For instance. I have 2 online banking accounts, and one big bank account. The online accounts are for paying bills since they are fee free for unlimited transactions. The big bank account is for investments since credit unions and online banks don't offer the products I want. To maximize my savings, I keep the minimum needed in the big bank to waive the monthly fee, even though the interest rate stinks. For the online accounts, my savings is shifted towards whichever online bank offers the highest interest. I check every couple months to see if there's a difference in the rates, and move the money accordingly.
If you look over the span of a year, picking the lowest fee, highest interest institution can save you quite a bit, and put you further along the road to more savings!
Friday, August 26, 2011
Credit cards... evil or money savers?
When it comes to credit cards, it can be your easiest way to save, or your worst enemy. For those that have a good control on your spending habits, a credit card saves you money in a couple ways.
1. Deferred payments. Usually when you put something on your credit card, you have between 10-28 days before your statement arrives and you have to pay it. If you have some money stored away in the bank, that's an extra 10-28 days of interest in your pocket every month!
2. Rewards. Rewards are the biggest part of using credit cards. My preference is cash back cards, as they are the most practical. They can range from 0.5% to 1+% depending on the card. Personally I use a TD Smart Cash card, which gives 3% back on groceries and gas, and 1% on everything else without any annual fee. Some of the higher cash back cards may require an annual fee, so do a quick number crunch before you sign up. Sometimes a no fee, but lower reward is a better deal for you.
For those that use certain companies often, their own store credit cards can sometimes be more enticing than generic cash back or rewards cards as they encourage using their card in their own stores. These can be upwards of 3%! e.g. Canadian Tire, Sears, HBC, etc. Many offer one time sign up bonuses as well, so keep an eye out for those!
For the more advanced credit card users, you can have multiple cards, and utilize whichever card gives you the biggest reward for the place you shop.
To maximize your savings, use a credit card whenever possible, instead of cash or debit. Every penny counts, so go out and credit card that $0.50 chocolate bar!
1. Deferred payments. Usually when you put something on your credit card, you have between 10-28 days before your statement arrives and you have to pay it. If you have some money stored away in the bank, that's an extra 10-28 days of interest in your pocket every month!
2. Rewards. Rewards are the biggest part of using credit cards. My preference is cash back cards, as they are the most practical. They can range from 0.5% to 1+% depending on the card. Personally I use a TD Smart Cash card, which gives 3% back on groceries and gas, and 1% on everything else without any annual fee. Some of the higher cash back cards may require an annual fee, so do a quick number crunch before you sign up. Sometimes a no fee, but lower reward is a better deal for you.
For those that use certain companies often, their own store credit cards can sometimes be more enticing than generic cash back or rewards cards as they encourage using their card in their own stores. These can be upwards of 3%! e.g. Canadian Tire, Sears, HBC, etc. Many offer one time sign up bonuses as well, so keep an eye out for those!
For the more advanced credit card users, you can have multiple cards, and utilize whichever card gives you the biggest reward for the place you shop.
To maximize your savings, use a credit card whenever possible, instead of cash or debit. Every penny counts, so go out and credit card that $0.50 chocolate bar!
Wednesday, June 15, 2011
Coupons are your friends
Coupons are an easy way to save a few bucks on things you would normally need to buy anyways.
*note* NEED TO BUY. Buying things you don't need just because it's on sale is not saving you money!
Now I'm not talking about spending half your life stockpiling and dumpster diving for coupons like those "Extreme couponers" you see on TV. That's just unrealistic.
Coupons basically give you that extra little discount on whatever you're paying for. Whether it's a restaurant meal, groceries, household items, stationary, even car repairs, whatever it is you need.
Always keep an eye on local flyers, local newspapers, and "spam" you receive in the mail. There's also some websites like www.save.ca that mail out free coupons that you order online. Also things like Entertainment Books that you can purchase, have enough coupons for the book to pay for itself multiple times over. (And don't forget to wait for a sale on the book too!).
For store coupons, in general, manufacturers coupons (not specific to any one store) can be combined with in-store coupons. And in almost all cases, the coupons can be combined with sale items. So let's say your favorite toilet paper is on sale at a local store, and you have a manufacturer's coupon, you're saving on top of saving! If you have a few extra coupons, it's a great time to stock up!
*note* NEED TO BUY. Buying things you don't need just because it's on sale is not saving you money!
Now I'm not talking about spending half your life stockpiling and dumpster diving for coupons like those "Extreme couponers" you see on TV. That's just unrealistic.
Coupons basically give you that extra little discount on whatever you're paying for. Whether it's a restaurant meal, groceries, household items, stationary, even car repairs, whatever it is you need.
Always keep an eye on local flyers, local newspapers, and "spam" you receive in the mail. There's also some websites like www.save.ca that mail out free coupons that you order online. Also things like Entertainment Books that you can purchase, have enough coupons for the book to pay for itself multiple times over. (And don't forget to wait for a sale on the book too!).
For store coupons, in general, manufacturers coupons (not specific to any one store) can be combined with in-store coupons. And in almost all cases, the coupons can be combined with sale items. So let's say your favorite toilet paper is on sale at a local store, and you have a manufacturer's coupon, you're saving on top of saving! If you have a few extra coupons, it's a great time to stock up!
Waste not, want not
Given the push for green alternatives, and shrinking our carbon footprint, not wasting anything helps pinch those pennies.
Next time you want to grab a paper towel to wipe that counter, stop and think. Can I do it with a cloth towel instead? If you use paper towels, don't immediately yank 2-3 sheets and start wiping. Grab one, see if it does the job. If it's not sufficient, then grab a 2nd one to finish the job.
When you're at home, turn off lights and appliances that aren't in use, and only light up an area if you're there. If you were watching TV and want to go take a shower, turn off the TV, and all the lights in the living room before you go. Use energy efficient bulbs in areas where the lights will be on often. Switching to CFL bulbs saves 60-75% in energy, and switching to LED bulbs saves 90+%!
When the weather isn't exactly the right temperature for you outside, make clothing adjustments inside, rather than cranking up the thermostat, or the air conditioning. Use a thermostat on a timer, so the furnace doesn't need to come on while you're not at home. On average a 1 degree Celsius change in heating can save you around 2%. A 1 degree Celsius change in cooling can save you close to 10%! e.g. In the winter our thermostat is set for 15C when we're not at home and 19C when we are, and 17C when we're sleeping. If we're feeling a tad bit chilly, we just put on a hoodie or sweater, and walk around the house with socks on. In the summer we open windows, use plain old fans, or hang out in the nice cool basement. No air conditioning here! Compared to the average BC household of the same size and number of people, we're saving at least 20-25% in energy.
Remember, every little bit you don't waste (food, energy, paper, etc.), equals savings for your wallet, and a nice warm feeling that you're doing your part for the planet!
Next time you want to grab a paper towel to wipe that counter, stop and think. Can I do it with a cloth towel instead? If you use paper towels, don't immediately yank 2-3 sheets and start wiping. Grab one, see if it does the job. If it's not sufficient, then grab a 2nd one to finish the job.
When you're at home, turn off lights and appliances that aren't in use, and only light up an area if you're there. If you were watching TV and want to go take a shower, turn off the TV, and all the lights in the living room before you go. Use energy efficient bulbs in areas where the lights will be on often. Switching to CFL bulbs saves 60-75% in energy, and switching to LED bulbs saves 90+%!
When the weather isn't exactly the right temperature for you outside, make clothing adjustments inside, rather than cranking up the thermostat, or the air conditioning. Use a thermostat on a timer, so the furnace doesn't need to come on while you're not at home. On average a 1 degree Celsius change in heating can save you around 2%. A 1 degree Celsius change in cooling can save you close to 10%! e.g. In the winter our thermostat is set for 15C when we're not at home and 19C when we are, and 17C when we're sleeping. If we're feeling a tad bit chilly, we just put on a hoodie or sweater, and walk around the house with socks on. In the summer we open windows, use plain old fans, or hang out in the nice cool basement. No air conditioning here! Compared to the average BC household of the same size and number of people, we're saving at least 20-25% in energy.
Remember, every little bit you don't waste (food, energy, paper, etc.), equals savings for your wallet, and a nice warm feeling that you're doing your part for the planet!
Saturday, June 4, 2011
If it isn't on sale, don't buy it!
A basic rule of thumb. If it's not on sale, don't buy it! A great saver always waits for a deal. If there's something you want, but don't need in a hurry, wait it out. Chances are there will be sale on the item, rebates, coupons, or discounts. Some items like electronics tend to drop in prices over time, so set a price target, and wait until it hits your price target before buying.
Make sure to read weekly flyers for stores you frequent. Everything from electronics stores to grocery stores tend to have weekly specials in their flyers. Keeping organized and writing down things you see that you need from each flyer saves time, and gives you a handy shopping list when you go. It also helps you to compare prices between stores for those items you really need.
Beware though, some stores "sales" aren't always the best deal. A savvy saver always has an idea of what prices usually are, to truly know if it's really a sale!
Make sure to read weekly flyers for stores you frequent. Everything from electronics stores to grocery stores tend to have weekly specials in their flyers. Keeping organized and writing down things you see that you need from each flyer saves time, and gives you a handy shopping list when you go. It also helps you to compare prices between stores for those items you really need.
Beware though, some stores "sales" aren't always the best deal. A savvy saver always has an idea of what prices usually are, to truly know if it's really a sale!
Needs vs Wants
The biggest barrier most people encounter is not knowing needs from wants. If you truly wish to save money, you need to split your needs and wants into different piles. Things you need are things that you buy on a regular basis as necessities. Things you want are frivolous items that you can live with out. The items in the "want" pile should only be purchased if you can afford them, or you've saved up for them.
Every time you think about buying something or pick it up to look at, stop and think. Do I NEED this, or do I want it? Think about, "what would happen if I didn't buy it?" Even if it's on sale, but you don't need it, you are still wasting money. Do you really need that nearly identical purse just because it's a slightly different colour? Probably not.
Spending $0 is far better than saving 50% on something you don't need!
Every time you think about buying something or pick it up to look at, stop and think. Do I NEED this, or do I want it? Think about, "what would happen if I didn't buy it?" Even if it's on sale, but you don't need it, you are still wasting money. Do you really need that nearly identical purse just because it's a slightly different colour? Probably not.
Spending $0 is far better than saving 50% on something you don't need!
Small steps to saving money
Seeing all the people that have come and gone throughout my life, I've noticed that being financially sound, and saving money, doesn't come naturally to everyone.
I grew up in a household with 1 bread winner (dad), and 4 mouths to feed (mom, dad, me and my sister). Mom was a super saver. Between her excellent savings practices, and dad's single income, we always had what we needed, and never felt we were missing anything.
I've learned that spending a little extra time to cultivate good saving habits can go a very long way!
In this blog, I hope to share some tips my parents have taught me, as well as a few new tricks I've learned along the way. If you have any great tips or ideas, please feel free to share!
I grew up in a household with 1 bread winner (dad), and 4 mouths to feed (mom, dad, me and my sister). Mom was a super saver. Between her excellent savings practices, and dad's single income, we always had what we needed, and never felt we were missing anything.
I've learned that spending a little extra time to cultivate good saving habits can go a very long way!
In this blog, I hope to share some tips my parents have taught me, as well as a few new tricks I've learned along the way. If you have any great tips or ideas, please feel free to share!
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