[vc_row][vc_column][vc_column_text]Saving money should be an important financial aspect for individuals or for entire households. The act of saving can be challenging. Who wants to work around a budget? However, there are several guidelines and tips that may help you to save money without feeling budgetary constraints.


AThe first thing to do is to decide how much of your monthly income you are going to save. Experts suggest that you set aside 10% of your income. The percentage basis is because of the fact that people’s incomes are different and the money saved should be proportional to individual incomes.


BMoreover, individuals with higher incomes need a bigger retirement fund to keep their lifestyle and a bigger emergency fund. Multiply your monthly income by 0.10. If you initially struggle to set aside 10%, start small until you reach your 10% target.


CNext, ensure that you save the recommended monthly amount. Treat savings as an obligation to yourself and as a monthly expense. Treating savings the way you treat your utility bill can actually help you reach your financial goals.


To save money, strategically organize your savings to achieve your targets. While it’s easier to save a monthly amount into one bank account, it’s better to have several accounts. When you put your money into three different accounts (short-, mid-, and long-term), you are less likely to spend the money “accidentally” for anything other than what it is intended for.  This makes sure that the money you are keeping will be on hand when the need arises.



Short-term savings is money set aside for the near future. This traditional savings account holds the money you need to buy personal items like hockey tickets or furniture. This account can also be used for one-time expenses or minor emergencies.

The balance of your short-term account should contain at least CAD1,000. This also gives you peace of mind, since you know you are keeping money for emergencies. If you deplete your balance due to an emergency or an unexpected expenditure, remember to replace the money you have spent.



Mid-term savings is money that you may use in the next few years. Such savings account helps you to be financially stable. It also lets you reach your financial goals. You can use the money to buy assets that need a longer saving period, like a down-payment for a house or car.

As a safety net, you mid-term account can also be utilized to pay off expenses in the future, such as when you get ill or get unemployed for a period of time.  Experts suggest that this account should have enough for about 3 to 6 months of household or living expenses.

The safety net makes sure that you are able to pay bills and keep a household budget for up to 6 months even if you do not have an income source.  Even if you’re not working, you can still live comfortably, without having to accumulate credit card debts. Moreover, mid-term savings can be kept in short-term investments or MMA (money market accounts) that you can immediately cash out on.



A long-term saving account should hold your retirement fund. Aside from that, this account can be used for long-term financial goals like your children’s college fund or other considerable financial event.  Funds deposited into this account could come from investment money (bonds and stocks) or real estate.

It is not unusual for long-term money to be kept in several accounts depending on your financial goals and what you intend to use the money for. You can specifically set up an account for your retirement, for your children’s college tuition fees, for your grand vacation with your spouse when you turn 60, or whatever other purpose you might have for your savings.

If you want to achieve financial freedom, you need to know the basics of saving.  You need to determine the amount of money to save, when to save the money, and how to categorize your savings. With disciplined saving and spending, you can be assured of a brighter financially-stable future[/vc_column][/vc_row]