How to Save Money: Tips and Strategies for Every Budget

Personal finance is exactly that—deeply personal. Everyone has their own relationship with money. And while there isn’t a one-size-fits-all solution to handling finances, saving is important for everyone. 

Whether you’re just starting out on your saving journey or looking for new ways to build up your personal wealth, this article will provide practical, actionable tips to help you along the way.

Understanding Your Spending Habits

The sustainable spending method is an approach that helps you create a long-term plan for effective money management. Sustainable spending involves three phases: A (analyze) - B (brainstorm) - C (change). 

It’s hard to save money if you’re not crystal clear on how you’re spending it. Start analyzing your expenses so you know where your money goes each month. Document every coffee, grocery receipt, and monthly bill. Review your credit card and bank statements to see the full picture.

Keep a close eye on your spending with our expense tracker. Stay on top of your finances effortlessly. Use the Expense Tracker.

Once you’ve incorporated all your expenses from your receipts and bank statements, categorize them and tally them up. This will help you identify spending patterns and saving opportunities. 

Budgeting Basics

Effective budgeting boils down to knowing how much money you’re working with so you can make informed decisions. After you take stock of your expenses, note how much money you're bringing in after taxes. 

When you compare your income to your monthly expenses, you’ll have a clear picture of how much you’re spending and what you’re left with. Account for everything, including your rent or mortgage, student loan or credit card debt payments, and cash purchases like coffee or lunches. You can use something as simple as a spreadsheet or an app like Butterfly, Goodbudget, YNAB, and CreditKarma (formerly Mint). 

Create a personalized budget with our free Budget Planner and make budgeting a breeze. 

Budgeting with Irregular Income

If you have irregular income, such as freelance earnings or seasonal labour, reviewing your income patterns from previous months or years is crucial to making your budget valuable. Identifying patterns, like seasonal fluctuations, allows for proactive adjustments before the month starts and emphasizes savings throughout the year, not just on a short-term basis.

If irregular income is a new part of your life, focus your budget on basic needs until you identify an average income or pattern. That way, you can make gradual adjustments as needed. It may feel challenging in the moment, but conscious commitment typically pays off in the long run.

According to Credit Canada Counsellor Manager Mike Bergeron, “Navigating the lifestyle of irregular income is challenging, but the resilience and dedication to get through it usually makes you a better money manager, and that should be inspiring.” 

Small Shifts with Big Impact

Once you understand how much money is coming in and going out, brainstorm ways to improve your cash flow and commit to positive change.

Take the guesswork out of budgeting by finding a high-level guideline that’s flexible enough to work for your life. Many people find the 50/30/20 rule straightforward and helpful for this. The 50/30/20 rule essentially advises splitting your after-tax income into three spending categories:

• 50% for needs

• 30% for wants

• 20% for savings.

It’s common to let “wants” take precedence over saving, but prioritizing that 20% is critical. 

“Most people will try to save what is left after their monthly expenses,” says Bergeron. “However, the wealthy will save first and spend what they have left.”

Similarly, setting aside money is easier when you have clear savings goals and are excited about the future. It’s easier to make healthy lifestyle changes to save money when there’s a big-picture ‘win’ on the way.

Remember, it’s not all or nothing. If you’re not in a position to save as much as you feel you should, don’t be disheartened. Thanks to the power of compounding, every penny counts—and grows—in the long run. It’s better to save something than to save nothing. 

Cutting Down on Everyday Expenses

Often, it’s best to go back to basics when you’re trying to save. Small changes can have a big impact when it comes to saving. A great starting point is to tackle everyday expenses, like transportation, utilities, and groceries. 

How to Save Money on Transportation

Gas isn’t cheap. Add the ongoing costs of car maintenance and parking, and you have a large, potentially avoidable expense. Depending on your circumstances, you may find that you can save money and still make it to work on time by carpooling, cycling, or using public transportation.

How to Save Money on Electricity Bills

Electricity bills can account for a significant portion of your monthly expenses. While electricity costs vary from province to province, it’s a nearly universal bill. Some small adjustments to your electricity usage can help free up money for other priorities, like:

• Unplugging devices when they’re not in use

• Fully loading dishwashers and laundry machines

• Swapping out for energy-efficient appliances

• Sealing your windows in winter

• Setting your thermostat to ‘comfort mode’

How to Save Money on Groceries

Meal planning and preparation not only help you save time during the week, but sticking to a grocery list will help you resist the urge to splurge on dining out or ordering in. You can also uncover significant savings on groceries by switching to generic brands and discount stores.

Using Coupons to Save Money

You don’t have to engage in extreme couponing to reap the rewards of coupons in Canada. Using coupons for purchases you already intend to make can help you stretch your budget and help you get in the habit of researching for the best deals. 

You can also use an app like Flipp, which helps you price match items from various stores to find the cheapest one. 

Learn how to coupon like a pro. Watch the webinar with Coupon.Couple’s Dee for her top couponing tips.

Saving on Big-Ticket Items

Big purchases come with big price tags, but that doesn’t mean there aren’t workarounds to help mitigate some of the costs.

Don't shy away from used or refurbished items for big-ticket items like appliances, vehicles, or furniture. Local yard sales and online marketplaces can be a treasure trove of quality goods with smaller price tags. Seasonality can also help you. Some stores may offer discounts or end-of-season sales, particularly on floor models. If you can, plan ahead and time your purchase around a major discount holiday like Boxing Day, Black Friday, or Cyber Monday. 

One of the greatest expenses for many Canadians is housing. If you own your home, you can explore refinancing options to see if you can secure better rates. Renting out a room on either a short- or long-term basis is also an option to offset housing costs with income. Finding a roommate to share the load can help bring down housing and utilities costs.

When it comes to milestones and vacations, it pays to plan ahead. Treat a vacation or big event like any other savings objective and set a goal. Consider staycations to save on flight costs and monitor travel sites like Hotwire or Skyscanner to snag deals when they come up.

Building an Emergency Fund

Emergencies are a fact of life. If you don’t have money set aside for nasty surprises like job losses, medical issues, deaths, and divorces, they can hit you hard.

It’s important to create an emergency fund even while you’re paying off debt. Build a buffer account of three-to-six months’ worth of your take-home pay. Put it in a high-yield savings account with your bank or credit union that you can pull from in a pinch. Three-to-six months may sound daunting, but mini-goals can help make it more attainable. Start with $1,000, then one month’s expense, then two, and so on. 

How can I save $1,000 fast?

Here are a few ways to save your first $1,000:

• Meal plan and grocery shop using coupons 

• Avoid dining out or ordering food delivery

• Sell items you aren’t using on Facebook Marketplace, like extra electronics or clothing 

• Reduce your electricity and water consumption

• Get a roommate or rent out a room if you own your home

• Sell your car and opt for carpooling or public transportation.

How to Save Money During Inflation

Inflation is a significant source of financial pressure for Canadians. It can feel particularly stressful because inflation can vary drastically from month to month or year to year. 

Budgeting is the first step to fighting inflation and can help you identify where the most fluctuation occurs. Grocery shopping is often a large variable cost that can be managed with meal planning and couponing. Avoiding impulse spending or unplanned purchases is also a good idea.

How to Save Money When You’re on Social Assistance

The different regulations surrounding welfare schemes have some nuances that can impede people from building savings. Every province has its own social assistance system, so it’s important to understand your region's social assistance savings regulations. 

For example, Ontario has two main social assistance programs: Ontario Works (OW) and the Ontario Disability Support Program (ODSP), each with its own savings limit thresholds. Similarly, BC has income assistance programs, as Alberta does with Income Support. 

Building savings in a Tax-Free Savings Account (TFSA) within your welfare limits can help build a financial buffer and create a sense of security. 

Leveraging Financial Tools and Resources

Saving money doesn’t have to be complicated. 

Whether you’re saving for a milestone birthday vacation or starting your emergency fund, there are many areas where budget adjustments can have a massive impact on your finances. In addition, the Benefits Wayfinder can help you find government benefits based on your location and unique circumstances.

And, if you’re too overwhelmed to go at it alone, Credit Canada can help. We offer a full range of resources and tools to help Canadians start budgeting, overcome debt, and learn how to build a better financial future. Get free, confidential, and non-judgemental credit counselling and personalized guidance according to your specific situations.

Speak to a certified Credit Counsellor today to transform your spending habits and invest in your future. Contact us to get started, or give us a call at 1(800)267-2272.