Building financial stability can be a tough process for many people in the United States, Canada, and beyond. Long term savings and investing practices are often left by the wayside when life creates new strains and opportunities that are hard to ignore. However creating a long term plan that will bring you financial freedom in the future isn’t as hard to complete as you might initially think. While Americans are not generally great at saving for a rainy day, studies suggest that Canadians are more in tune with this fiscal requirement.
These five tips can help you continue to build on past successes for greater financial control in the long run.
1. Add to your savings now.
If you are already saving then you are already working toward a positive future. However, it’s essential to be realistic about your financial goals and the steps you are taking to get there. If you want to save $10,000 over the next five years (as 64% of Canadians say they aim to do) then you need to build a long term strategy that will help you achieve that outcome. Putting away a few pennies at the end of the week simply won’t cut it. Boosting your current saving allocation is a great way to breathe new life into your savings account and strategy for long term self-sustainability.
2. Switch to an online bank or credit union that offers a great interest rate.
Finding a new bank that gives you a great growth rate is important too. Search for: “best online banks in Canada” to get started on this hunt for a financial institution that has a savings account that meets your needs. Often, online banks offer the greatest interest rates on savings accounts. This is because without the brick and mortar locations to staff and maintain, customer service, mobile app development, and high interest rates take precedence. Online banks are usually customer-forward, offering a new take on the banking industry itself.
3. Cut down on credit card purchases.
The interest rates on credit card purchases are often abusive. Compared to the returns that your money can make, credit cards take off a huge chunk out of your long term spending freedom. Paying for routine purchases in cash (or with your debit card) is the best way to ensure that you are always ahead on your finances. Of course, this isn’t always realistic, but making a concerted effort to reduce your reliance on credit card purchasing power can help you to boost your credit score and financial health, making the big borrowing opportunities (a car or home loan for instance) more manageable.
4. Trade in your car.
Vehicle sales in Canada are booming, and there is a surprising financial power that comes with a trade in opportunity that many don’t recognize initially. When you get a new car you are purchasing it for the dealer price, but you also gain access to fuel efficiency that will either cost you an arm and a leg or save you money over the long term. Searching for “trade in used car Regina” can help you find a reputable dealership that will get you behind the wheel of a new car. That same new car may end up saving you money each week and month as you continue to refill the tank for less.
5. Think of personal finances in terms of percentages.
Finally, thinking of your finances in percentages can give you a totally new perspective on the spending habits that are making dents in your financial security. Weighing spending categories by percentage against one another over month to month snapshots can give you greater insight into where your money is going on a weekly, monthly, and quarterly basis. This provides greater measures of control when you want to change your spending for the better.
With these tips, making financial independence a reality is far easier to accomplish. Make your savings account a priority and you’ll never look back.