Saving money, especially long-term savings, can be difficult. It’s tough to know where to begin or how to allocate money efficiently. Feeling like your financial plan is guesswork can be discouraging, but there are some simple steps you can take to get your savings on the right track:

  1. Start by developing a plan. Without clear goals and a roadmap for meeting them, you won’t be saving to your full potential. Outline what it is you’re saving for, and how far in the future. Be realistic with the targets you set—if the numbers aren’t adding up based on your current income, you may need to adjust your timeline.
  2. Improve your knowledge. There’s a great quote from Abraham Lincoln: “Give me six hours to chop down a tree, and I’ll spend the first four sharpening the axe.” Sharpen your savings axe by investing time in improving your financial literacy. There are courses and resources available for adult learners, like Money Matters, a free introductory financial literacy program. Taking a course can help you make more confident decisions when it comes to managing your money, and develop more efficient and effective savings strategies.
  3. Pay down debt while saving. Like taking the time to educate yourself, paying down debt is a strategy that can help your savings in the long term. Paying down your principal—the amount you borrowed—reduces all your future interest payments, letting you put that money towards your goals instead. 
  4. Build a budget that works for you. Everyone’s needs and situations are different. Building a budget means looking at your circumstances honestly and setting priorities that will support you as you work towards your goals. A good place to start is separating your expenses into needs and wants, and making sure the needs—basic expenses you can’t do without, such as shelter, food and water—are accounted for. Then you can budget for wants more confidently, knowing that you’ve got the essentials covered. 
  5. Be prepared to adjust your plan. Your circumstances will change—income may rise or fall, you may have unexpected expenses or have to adjust for changing economic conditions. The amount of your budget that goes toward paying down debt may decrease when you’ve paid off more of your principal. Staying flexible and being willing to reassess your plan are important for making the most of your money and meeting your goals sooner.

You can learn more about managing your money and improving your financial literacy at abcmoneymatters.ca.