By Jesse Stilwell, January 9 2018 —
You may have recently resolved to save more money. This is an excellent goal that can benefit you for years to come, even if you only make small changes to your habits. This article isn’t going to include the boring old wisdom of living off cash or always paying your credit card bill in full. You should definitely do those things, but this article is meant to help you build a savings account and change your spending habits sustainably. Though it’s tailored to students who have part-time jobs, there’s something helpful in this list for everyone. Here are four tips to maximize your bank account’s gains:
1. Set a budget:
Students’ lives are filled with unexpected expenses and their income is often unpredictable. Even if you can only decide on a very rough plan of how you will structure your spending, that’s a step in the right direction. You probably know how much your fixed expenses — car insurance, your phone plan, rent — will be, so factor those in first. Then set reasonable limits on your extra spending. It might be tempting to go a little over budget to have one more coffee per week or park in the Arts Parkade rather than taking transit, but having a budget will help you stop going overboard because it’s embarrassing to not stick to such a simple plan. If you budget correctly, you’ll actually be able to afford the notorious avocado toast that baby boomers keep telling you to stop buying.
2. Save from every source of income:
If you get bi-weekly paycheques or survive on a few scholarships over the semester, try to save a small percentage from each. It doesn’t have to be huge — even five per cent from every source of income will add up over the course of the year. Put your savings into an account that penalizes you if you try to spend out of it. Or better yet, open a Tax-Free Savings Account and invest in a mutual fund. If you’re following a budget, mark these savings contributions as fixed expenses. Most banks allow automatic transfers to your savings from other accounts. This way you won’t notice the money leaving until you decide to cash in your savings for a graduation trip or a new car.
3. Use technology for support:
Download your bank’s mobile app and teach yourself about all of its features. For example, being able to cash cheques from my phone has made collecting money from textbooks I’ve sold at Bound and Copied a lot easier. There are also thousands of budgeting apps to help you when you’re first learning how to save. It’s hard to keep track of how much you’re spending when you have to physically go to a bank machine or outlet to check your balances. Monitoring your actions from the palm of your hand makes you much more likely to notice if you’re being frivolous and curb your spending until your budget resets.
4. It’s a marathon, not a sprint:
You’re going to make mistakes. Something might happen this year that decimates your savings accounts. But the great thing about teaching yourself how to save your money is that these setbacks won’t ruin the progress you’ve made towards permanently changing your habits. Saving money should be a lifelong commitment. Don’t think of saving as merely working towards small goals like vacations or a new phone. It’s never too early to think about your long-term financial goals, like buying a house or retiring. The future is incredibly uncertain, but one thing is for sure — you won’t regret building savings as early as possible. Good luck out there!
Articles published in the Gauntlet‘s opinion section do not necessarily reflect the views of the Gauntlet editorial board.