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How can I save money?
 
There are many different ways to save money. Click on the links to learn about:
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How can I decide how much to save?
 
How much you save will depend a lot on two things:
 
1. Your financial situation. Some people aim to save between five and 10 percent of their pay. Others aim higher. But if you have a lot of debt and a lower income, saving even $20 a month can be hard.
 
2. Your goals. For example:
The best way to decide how much to save is by having a financial plan for the future. Budgeting and managing your money can help you save more right now so you move faster toward your financial goals.
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What kind of return should I expect on my savings?
 
Some kinds of savings and investments are very safe. There is very little or no risk you will lose money. But your money often grows more slowly. For example, savings in a bank account may grow only two or three percent yearly.
 
Other kinds of investments are higher risk. They may grow your money faster ó but only if the investment works out. Just remember you could also lose money if it doesnít. And you donít know for sure how it will turn out.
 
Lower risk investments include:
Higher risk investments include:
Learn more now about these investments.
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What is the rule of 72?
 
There is a simple formula called the ďRule of 72Ē you can use to calculate how fast your money will grow. You just take the interest rate you are earning, and divide it into 72. Thatís how long it will take for your money to double. For example, 6 x 12 is 72. At 6% your money would double in 12 years. At 12%, your money would double in six years.
 
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How can time affect my savings decisions?
 
You may not need the money you are saving for retirement for a very long time. You may need the money you save to buy a car, or a house next year. So before you invest, you need to think about when you may need the money. The next two questions in this FAQ will give you some examples of short-term and longer-term investments.
 
Click here to learn more about different kinds of investments. A financial plan will help you decide on your goals and what kinds of investments to make for the short term and the long term.
 
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Where can I put savings for the short-term?
 
A savings account may be a good way to save for a vacation, or a new stereo you plan to pay for three months from now. It is also a good idea to have some savings that you can get right away, in case you ever need money fast. And for things you may need a year or two from now, consider Guaranteed Investment Certificates (GICs). Sometimes GICs pay higher interest than a savings account.
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Where can I invest money I donít need soon?
 
If you donít need your money or a few years, you have many investment choices. For instance, to avoid losing money, you may look at buying some type of bonds or Canada Savings Bonds. If you are comfortable with more risk, you may want to invest in the stock market. Many people put some of their long-term savings in mutual funds, Exchange Traded Funds (ETFs), or stocks.
 
Just remember: there may be fees or other costs if you take money out of mutual funds, savings bonds, and other investments. So it is always wise to have some savings you can easily get if you need money right away.
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How can savings plans help me save money?
 
The most important thing about saving is to have a plan and stick to it. Money grows over time, so it is important to start early and save regularly. But many people find it hard to save every week or every month. Thatís where a savings plan can help.
 
A savings plan makes your savings ďautomatic.Ē That way, you are saving every month without having to think about it and without having to do anything. For example:
If you think a savings plan is right for you, ask your employer or your financial institution about what kinds of plans they may have to offer.
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