Same sex couple preparing tax return together
Personal Finance

Struggling to save? These pro tips can set you on the right track

Even if you are finding it difficult to get your spending under control, there are ways to build good habits and start tucking away some funds for the future

Same sex couple preparing tax return togetherThe best way to get started on any savings plan is to track your monthly spending (Getty Images/kate_sept2004)

As we know, the pandemic has caused financial hardship for many people. According to one poll, for example, two thirds of respondents were concerned they would not recover financially from the pandemic. 

But it’s precisely in difficult periods that it becomes even more important to be aware of what we’re spending and to set away funds for the future. 

If you are among those Canadians who are having trouble saving—either because of ingrained habits or circumstances—there are still ways to get your spending on track.

Here’s how to sow the seeds for good savings habits that can set you on a solid financial footing for what we hope will soon be a pandemic-free future.


Most experts agree that the best way to get started on any savings plan is to track your monthly spending. As CPA David Trahair, a financial trainer and author of several books, including The Procrastinator's Guide to Retirement, points out, “Every person’s personal financial situation is as individual as their fingerprints—and your fingerprint is your historical spending.”

While tracking your spending is important—and many banks make the process easy by giving you free access to proprietary and secure budgeting and spending tools—many people just don’t do it. “Unfortunately, these are often people who spend more than they make,” says Trahair. 


Even if you don’t track your expenses, you should know if you can pay off your credit cards every month. If you cannot pay the balance, you are a revolver—i.e., you carry a balance, paying high interest along the way. 

According to Trahair, this is financial folly. “If you owe $20,000 to a bank and it is charging you 20 per cent interest per year, you are adding $4,000 in non-deductible interest to your debt each year.” 

If you are a revolver, Trahair says it does not make sense to invest in a tax-free savings account (TFSA) where you might make two per cent interest. “Mathematically, it makes far more sense to pay off your credit card debt,” he says. 


Probably the easiest way to save when you’re not a saver is to regularly pay yourself first by having a certain amount transferred from each paycheque to a Registered Retirement Savings Plan (RRSP) or a TFSA at a brokerage or other financial institution, says Trahair. “That way, you won’t even miss the money.” 

CPA Stan Tepner, a portfolio manager at CIBC Wood Gundy, adds that if the money is transferred into a personally held RRSP, you can apply to the CRA and receive authorization for your employer to reduce your tax deductions at source. “That way, you will end up with a bigger net paycheque, rather than having to wait for a tax refund later.” 

Tepner adds that some workplaces allow you to have a portion of your salary automatically invested in a group RRSP, group TFSA or share purchase plan. “The group RRSP programs automatically reduce taxes withheld at source, without an application to the CRA,” he says. “And the other two programs encourage automatic savings from after-tax earnings.” 


Knowing what you are ultimately saving for—and whether your goal is 50 years or 10 years away—makes a huge difference in the savings strategies you should adopt. 

“If you’re building a nest egg for retirement in 50 years, you can afford the risk of investing more heavily in the stock market,” says Trahair. “But, if you are saving for a down payment on a house, it’s better to opt for GICs or similar safe products. You might make only one or two per cent, but you won’t be running the risk of losing 50 per cent or even more of your money right before you need it.”


Just as a detox cleanse aims to cut out the harmful items in your diet, a financial cleanse eliminates “toxic” spending—spending that one article calls “emotionally charged, wasteful or just mindless.” 

An important part of the cleanse involves going on a spending fast—i.e., putting a stop to any purchases that aren’t truly needed. “For example, you might have a weakness for shoes or athletic gear,” says Tepner. “With fasting, you just try to stop spending on that item for a certain time to see if you can live without it.” 


In addition to cutting some expenses completely, you can simply pay less for many items, says Tepner. “There are plenty of examples—making your own lunch to using coupons to cancelling memberships you don’t use,” he says. You can also use Flipp, an app that houses flyers and catalogues from many retailers and allows people to easily search and price match.

There are ways to save on seasonal spending also. As CPA Bill Stephenson, a sole practitioner and volunteer with CPA Canada’s financial literacy program, points out in a blog, you can start a gift exchange with family and friends and put a dollar limit on the gift. In some cases, too, you can even go gift-free. For example, when possible, you can encourage loved ones to volunteer at a local food bank or take the kids skating at a public park. “That good feeling of being with your family and friends is often the best gift of all,” says Stephenson.


While Trahair is a big proponent of paying down debt, he recognizes that if your goal is retirement, you also need to consider the savings side. “If you just focus on reducing your mortgage to zero by retirement, you might run into cash flow difficulties if you haven’t saved enough.”

The solution, as he sees it, is to keep everything in balance. “Ideally, you should pay off the mortgage before retirement, but you should also make sure to you have saved enough so that you can afford to pay your living costs.” 


In the end, building healthy saving habits is all about awareness: you have to know what you are spending—and why—before you can uncover opportunities to save. But once you kickstart the process, you just might find you enjoy it. 

As Trahair puts it, “You’ll reap the rewards in the form of lower credit card bills and higher savings balances. Better still, you’ll lose far less sleep worrying about your future finances.” 


CPA Canada has a wealth of resources—from guides to information sheets to workshops—that can help both individuals and couples get a better grasp on their money. 

Think it’s too late to start saving for retirement? Find practical solutions in The Procrastinator’s Guide to Retirement.