Have any? If not, the tips below will help you get some. Don’t kid yourself, it won’t be easy. The temptation of having a little extra cash on hand can be too much for many, causing them to splurge on a fancy dinner or a DJ turntable to impress the kids.
Canadians lie about their finances — a lot. Here’s what we need to overcome to build the pot.
Canadians lie. A lot. Especially about money. A BDO Canada Ltd. survey found that more than half of us lie about our financial situation, with 36% saying they do so because they want to protect their loved ones from worrying. We lie about our credit cards and monthly expenses, how much we’re saving for our children’s education, whether we have enough for a vacation, entertainment expenses and, of course, our retirement plan. The biggest liars? The middle-aged. Almost 55% of those aged between 35 and 54 years old lie about their finances and they are the ones with the most earning potential, the biggest debts and the most happening in their lives.
All that lying will likely mean bad news down the road. “The fastest-growing statistic in insolvency is seniors having either a bankruptcy or proposal,” says Doug Jones, BDO trustee in bankruptcy. Granted, most of these lies are likely small ones, maybe even white ones, but they can add up over time and that’s what worries Jones. “All of the assumptions about how much you need in retirement are always based on a paid-for home and no debt, and that is not the reality of the world any more.”
Of course, there’s still time, which is why it’s important to not let past mistakes haunt you, says Edward Jones advisor Jonathan Rivard. That means breaking the habit of amassing credit-card debt, “especially if you’re in the even-more-terrifying habit of recycling credit” by paying off a credit card with a different credit card or line of credit. You can quickly ratchet up your debt if you’re not keeping a lid on all your various debt lines. After all, it’s pretty hard to save up if you’re forever paying something off.
But keep in mind that not all debt is created equally. “In some situations, it’s perfectly reasonable good debt to have and it’s at a good interest rate to have it,” says Tracy McLennan, a wealth advisor at CIBC Wealth Advisory Services. “Paying down your debt is just another way of achieving your goals so that I have a net worth and a capital base to achieve those things that I want.” Read on for 20 more tips on how to boost your savings.