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What is the 30-day rule?

The 30-day rule is a temporary guideline that can help you adjust your spending habits. If you see a product you like in a store, this rule suggests you wait 30 days before purchasing it to see if you still want to buy it after that period.

If you no longer wish to purchase that product or service, the money should be transferred to your savings account. This rule helps you avoid making unnecessary or impulsive purchases.

How does the 50/20/30 rule work?

Elizabeth Warren introduced the 50/20/30 budgeting rule in her book All your Worth: the Ultimate Lifetime Money Plan. The rule involves dividing and spending your after-tax income as follows:

• The rule states that you should allocate 50% of your after-tax income to your needs and obligations.
• The remaining half should be divided, with 20% allocated to paying down debt and saving, and the remaining 30% available for discretionary spending.
• This rule is a model designed to help individuals manage their money and credit for emergencies and retirement.

10 Best Tips for Saving Money

1. Keep an Eye on Your Expenses

To begin saving money and improving your credit, you must first determine how much you spend. Monitor all your expenses, including coffee, groceries, and cash tips. Personal finance management is a straightforward strategy that can save you a significant amount of money in the long run!

Once you have gathered your information, categorize it into areas such as gas, food, and mortgage payments, then total the amounts. Review your credit card and bank statements to ensure nothing has been overlooked.

Tracking your expenses will help you determine how much you can spend each month and identify areas for improvement. You might realize you are spending more than necessary on items you do not need – or that you are overspending on things that could be obtained more affordably!

2. Focus on Your Debts

If you are trying to save money by budgeting but still have significant debt, you must first focus on addressing that debt, otherwise it will continue to deplete your funds. Once you are no longer paying interest on your mortgage, you can quickly redirect that money into your savings. A personal line of credit can be a way to consolidate your debts and make repayment easier.

3. Set Savings Goals

Visualizing what you are saving for is one of the most effective ways to save money. Do you want to buy a house with a 20% down payment in three years? You now have a clear goal and know how much money you need to save each month to achieve it. To reach your goal, create a spreadsheet and calculate the amount you will need to save monthly!

4. Less is More

It can be very challenging to budget if you have a large sum of money intended to last for an extended period. It is difficult to budget $2,400 over three months, but it is much easier to manage $800 per month.

Use a savings account as a holding cell; calculate the amount of money and credit you need per month, then transfer it to your primary account. Working month-to-month with a smaller amount will help you reduce unnecessary purchases and save more. You can even automate this process by setting up a monthly automatic transfer from your savings account to your primary account.

5. Save on Utility Costs

Request an energy consumption report from your electricity provider or find a certified contractor who can perform an energy efficiency assessment of your home. This could be as simple as sealing windows and doors, or as complex as installing new insulation and high-efficiency appliances.

By lowering your water heater's thermostat by just 10 degrees, you will save 3 to 5% on your energy costs. Compared to a traditional storage water heater, installing an on-demand or tankless water heater can save you up to 30% on your energy bills. This is a long-term solution, but you could save tens of thousands of dollars in utility costs over 5, 10, or 15 years.

6. Re-evaluate Your Phone Plan

You could save money by changing your plan if you are paying extra fees or for more data than you need. Review your provider's plans and choose the one that best fits your budget. There are many plans, providers, and companies available. Switching plans or providers could save you $40 per month.

7. Analyze Your Lifestyle Habits

If you are re-evaluating your phone contract, it is also a good time to re-evaluate your other subscriptions. Do you spend hundreds of dollars annually on cable, Netflix, Hulu, Amazon Prime, YouTube, Spotify, etc.? It may be time to ask yourself if you truly need all these services.

Similarly, if you dine out or go to bars several times a week, or frequently order takeout, it might be wise to limit yourself to a few times a week and establish a monthly budget specifically for dining out.

8. Meal Plan

Food is one of the most significant factors that can hinder your ability to save money. The cost of takeout, excessive grocery spending, and frequent visits to the grocery or convenience store can quickly add up! Planning your breakfasts, lunches, and dinners for the week will help you control your weekly expenses while taking advantage of grocery store discounts.

9. Self-Control

The biggest obstacle to saving money is often yourself. It is very easy to go out and spend on payday. If you tend to make impulsive purchases, overspend, and are a bit too liberal with money, you should implement strategies to prevent yourself from spending.

Obviously, as we have mentioned, planning meals and expenses is an excellent way to achieve this, but another method is by applying the 10-second rule.

The 10-second rule states that before making any transaction, you should pause for 10 seconds to consider why you should not proceed with it. Ask yourself the following questions:

• Is it necessary?
• Do you already own something similar?
• Is it possible to borrow it?
• Could this money be used for something better?

10. Transportation

Transportation can be very costly, but there are many ways to use it to your advantage and save money:

• Ensure your car tires are properly inflated. Under-inflated tires create more friction with the road, leading to faster wear and reduced fuel efficiency. Check your tire pressure once a month and inflate them to the maximum recommended pressure.
• Buy a bicycle. A bicycle is a quick and convenient way to get around.
• Utilize public transportation. If you live in a city, using public transport can save you a significant amount of money (on gas, parking, etc.).
• Walk. Consider walking instead of driving if your destination is only one or two kilometers away.
• Carpool. If you regularly drive to work (or another location), you can carpool two or more times a week. This can save you up to 20% on car wear and fuel costs weekly.

What is the best place to put your money?

Savings Account

A standard savings account in Canada is a simple and easy way to build a reserve for your money. While several types of savings accounts exist in Canada, the two main ones are the fixed-rate account and the variable-rate account.

Tax-Free Savings Account  

In Canada, investing your money in a Tax-Free Savings Account (TFSA) is an excellent way to save for the long term. A TFSA allows you to place money into eligible investments and watch it grow tax-free throughout your lifetime. Within a TFSA, interest, dividends, and capital gains are tax-free for life. Funds from your TFSA can be withdrawn at any time and for any reason, and all withdrawals are tax-free.

Need help getting rid of your debts and saving for the future?

This article provides an overview of how to save money. However, these tips may work better for some individuals than for others. If you are concerned about your financial situation, do not hesitate to contact a Licensed Insolvency Trustee.

Serpone Group offers the following services:

• Financial Consultation and Assessment
• Consumer Proposal
• Personal Bankruptcy
• Debt Consolidation

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