When David Chilton wrote The Wealthy Barber in 1989, millions of North Americans bought it. The messages were clear and simple. The strongest: “Save ten percent.” We all nodded and sighed. Yes, indeed, we should be saving.  And once upon a time we did. But even David is disheartened by how little we’re saving and how much debt we’re piling up, driving him to write The Wealthy Barber Returns.

Canadians had the reputation of being good savers. Between 1973 and 1993 we saved 10% or more, with our savings rate reaching a peak of 18.5% in 1982. In 1993, four years after David started preaching about how important it is to “pay yourself first”, we began our great slide. By 1999 we’d hit an all-time low of 3.6%. But we weren’t done slipping yet. In 2003, the average Canadian saved just 1.4% of his pay. And in April of 2007, the personal savings rate came in at NEGATIVE 1.3%.

Why?

That’s the big question. Why would we just stop saving? What happened to make us think that we didn’t have to put away some money for the future?

In Boom Bust and Echo, David Foot asserted that, “When you are young, you are a borrower. In your 40s and 50s, you are trying to build a nest egg for retirement.” Yet since 1993 as we watched the first of the baby boomers turn the corner to middle age, the savings rate plummeted despite a healthy economy, low inflation and more being written about the importance of saving. Today there are more people going into retirement with debt than ever before. Not just mortgage debt, which is bad enough. But stupid consumer debt because boomers, ljke everyone else just can stop scratching their consumption itch.

Okay, so what we know we should do and what we actually do are totally different things. Whether you want to blame higher taxes, easy consumer credit, a booming housing market or job losses, the reality is that we are not saving what we should.

What’s the solution?

Perhaps if we each took the time to figure out what are life will actually look like if we try to live on the pittance we’d receive if we have no money of our own it might jolt us into reality. And perhaps if, for just one month, we forced ourselves to live on the much smaller income we are dooming ourselves to because we don’t save, it would be the wake up call we’d need to start squirrelling a little sumthin’ sumthin’ away while we still can.

You: I should get my RRSP money in as soon as I can.

You: Ah, but I’m really not sure where to put the money.

You: Doesn’t matter just get it in.

You: But I kinda hafta decide what I’m gonna buy before I open up the RRSP. Will it be a mutual fund, or a GIC or a segregated fund, or will I buy the index?

You: If you wait to decide, you’ll never put the money in the account.

You: Yah, but I can’t decide, so I’m going to wait.

Could it be that the reason we don’t save is because with so many choices on how to invest we’re stymied. Yes it could.

Sheena S. Iyengar of Columbia University and Mark R. Lepper of Stanford University have found in their research that people are less likely to make a decision when they face too many options.

They set up sampling booths at a grocery store offering some customers 6 choices of jam and other customers 24 jars of jam. While only 40% of passersby stopped at the booth featuring 6 different types of jam, 30% actually bought the product. The larger display drew more tasters: 60%. But here’s the kicker: only 3% actually bought the product.

It seems that having too much choice seems hampers our ability to make the decision on what to buy.

Hey, if you can’t decide what you should buy with your RRSP dollars, you can always go with a Savings Account option to get the money in before the deadline. Once that decision is out of the way you can then focus on what you’ll invest those dollars in to make them grow.

In choosing your investments for your RRSP make sure:

1. You know what you’re buying

2. You’re staying true to your investment personality (your ability to handle risk)

3. You stay in line with your investment time horizon.

To actually save a dollar you have to take that dollar out of your cash flow. Putting it in a TFSA and then spending it on a credit card doesn’t count. You must make the commitment that current expenditures will not exceed current income. You’ve got to spend less money than you make.

Your PSR is a measure of how much money you save out of the money you make.

First, write down your monthly net income. That’s the money that is actually hitting the bank in a month – so it’s your gross less taxes and whatever other deductions you may be paying. If you have a fluctuating income then you’ll have to do a little more work. Grab your bank statements for the past six months and add up all the deposits you have made. Ignore transfers. Include all the money that went into your account including your pay, commission, bonuses, support you received, repayment of medical costs or business expenses, and government payments like child, retirement, and disability benefits.

Keep in mind that if you belong to a company pension plan or have amounts taken off your paycheque for savings each month, to make this calculation work for you add those amounts back into your income so they will factor into your savings rate.

Once you’ve totaled up your deposits for the past six months, divide your total by six. That’s how much you bring in on average every month.

Next, figure out your monthly spending. Notice I didn’t say “expenses.” You’re actually going to have to look at how much went out, not what you thought went out. It doesn’t matter what you spent it on. If it went out, count it. Include what you spent on your credit card, using your debit card, by writing cheques, by accessing your line of credit, or in cash.

Then, subtract your monthly spending from your monthly income.

This is simple math. Take the amount you earn on average each month and subtract the amount you spend on average each month. That will give you your monthly savings.

Finally, calculate your PSR. Divide your monthly savings by your net monthly income and multiply by 100. If you end up with a negative number, then you’re spending more than you make. If your answer is a positive number, you have the money to save. So does your TFSA, RRSP, RESP or other investment account reflect your savings potential?

When was the last time you looked over your home phone and cell phone bills? People shell out thousands of dollars a year on communication without a second thought. A little attention could net you a cheaper plan that gets you what you need and puts money into your savings account.

Ditto your electrical bills, your gas bills, your credit card statements, your bank statement. Do you know off the top of your head what you paid in service charges on all your bank accounts last month? No? Time to read your bill!

Today, spend one hour going over ALL your bills so you’re completely familiar with where your money is going. That’s right, gather them all up, get yourself a highlighter pen and start familiarizing yourself with where your money’s going. If you find places where you’re surprised at what you’ve been shelling out, it may be time to re-evaluate what you’re getting for what you’re spending.

Are you paying to have movies piped in, but never seem to watch? Axe it.

Are you buying services at a premium? Move to a lower level of service.

Paying for membership at a gym that you haven’t visited in six months? Lose it.

Paid even $1 in banking machine fees? Stop it!

Look for all the things you pay for, but seldom use, and as you chop, trim, slice and dice, make a list of the money you’re saving.

Eliminate just $50 worth of monthly spending, and you’ll have $600 to add to your savings this year. Take that $600, invest it in an RRSP at an average return of 5%, and REINVEST your tax refund every year to make your RRSP contribution grow and in:

• 20 years you’ll have $29,610
• 25 years you’ll have $37,485
• 30 years you’ll have $45,360
• 35 years you’ll have $53,235
• 40 years you’ll have $95,424

… all from a measly little $50 a month. Can you imagine what you could do with $100?

Merry Christmas all, hope your next few days will be full of joy and laughter. Repeat blogs next week. I’m heading to Arizona on the 26th for some much needed sunshine! I’ll be all sparkly and fresh when I get home. See you then.

Sometimes people think that if they can’t dump a lot of money into their RRSPs, it’s not even worth thinking about. Not true. Every penny you save today, is a penny plus growth that you’ll have when it comes time to punch out at work.

Put $25 a month into an RRSP, and give your money 25 years to grow at just 5% and you’ll almost double your money: you’ll have put away $7,500 but you’ll end up with $14,888.

Give yourself more time, and the results are even better. Let’s say you start contributing at 30 and do so until the normal retirement age of 65, you’ll have $28,402 just be socking away $300 a year. Com’on, you can find $300 a year.

If you can up your contribution to 2007 median RRSP contribution of $2780  and you give yourself 35 years, you’ll have $263,573. Yup, if you can trim your expenses back so that you can find $232 a month for your retirement savings, that’s how much money you’ll end up with. Not a b’zillion dollars… but nothing to sneeze at either.

And what if you were a little more adventurous and could earn even 1% more on your money? Well you’d end up with almost $67,000 more!

Don’t be sad about how little you can save today. And don’t let a small contribution stop you from starting. Find the first $25 a month, and grow your contribution from there. You can use your tax refund, part of your next raise, or the money you were wasting on some stupid habit to build a future. Plan now to start next month, and this time next year you’ll be all paid up!

People often misunderstand what “saving” is. Saving is “not spending money” and if you want to have “savings” you have to take the money you didn’t spend and put it somewhere to accumulate for the future.

So what was this chick doing wrong. According to her, she was having money taken from her chequing account every month and moved to about eight different pools of savings: vacation fund, long term savings, emergency fund, to pay her insurance, to pay for presents… it was a long list.

Here’s where her system broke down: having moved all that money out of her chequing account, she’d have to often dip into her “savings” to make ends meet. Or she’d end up putting stuff on her credit card she couldn’t pay off.

Hey, if you’re salting money away on one side of your ledger, and racking up debt on the other, that is NOT saving.

To make saving work, you first have to start with a balanced budget. Then you have to track your spending so that you can ensure you’re on track with how you planned to spend your money.

BTW, if you’re sticking money away for a vacation, for present buying or for insurance, that’s not savings; it’s “planned spending.”  Yes, you’re smart to accumulate money for big spends right along with your day-to-day needs. But it’s not savings. Unless it’s going into an emergency fund, or a long-term savings fund – think retirement or school – it’s not “savings.”

Quite some time ago my producer came to set with a refillable water bottle in hand declaring she had no intention of drinking bottled water again.  It got me thinking: y’know, she’s right. Even though I wasn’t a massive buyer of bottled water – I see people leaving the grocery store with skids of water under their carts – it was time to make the commitment to carrying my own bottle around. Check.

There are so many examples of ways to replace environmentally unfriendly habits with friendly ones and save money too.

1. Are you still paying 5¢ a bag when you’re out shopping? Did you notice that if you’re also paying HST the price went up to 6¢ in some places? Keep a stash of bags in the car, or a couple rolled up really small in your purse so you don’t have to shell out good money.

2. Still getting your coffee or tea is paper or Styrofoam cups? Get with the program. Buying a reusable coffee mug means you not only cut down on waste, you’ll save money on your refills.

3. Getting gobs of junk mail that fill up your recycling bag? Call and stop those catalogs from arriving. And if you’re still getting paper versions of your bills, switch to e-bills and save yourself the filing!

4. If you’re still buying lunch at work, and need another motivation to bring lunch from home, think about all the containers you end up throwing away at the end of your meal. And so many of them are Styrofoam! Yuck! Pack your lunch in reusable containers and not only will you be doing good, you’ll find scads more money in your budget available for saving!

People who have taken my message to heart are writing me to tell me all about how much better life is with an emergency fund at hand. I got this letter recently that made me cry:

Gail, I have to thank you. Before I watched your show, I didn’t have any money saved for, as you say, when the caca hits the fan. But I’ve been diligently putting away money every week and thank heaven’s I did. My husband died suddenly five months ago. He was riding his motorcycle to work and got hit in an intersection. I have four children and I’m three months pregnant. I had just been to the doctor that day, so he died not knowing we’re having another child. I felt like someone had reached inside me and dragged my stomach up out of my mouth.

I’m very lucky because I have a family that loves me. And I’ve got great friends. They all came. They brought food. They brought love. And they wanted me to know that if I needed any money, they’d help.

My husband and I bought life insurance about two years ago after I watched you tell a couple on TV how important it was. Thank God. But it would take time to get everything settled. In the mean time I had to make a mortgage payment, buy food, and pay for the kids’ daycare. I work but it wouldn’t be enough to cover everything.

I was able to tell my family and friends that I’d be fine. And it’s because of you. I told my husband just how important you thought it was to have an emergency fund (he had a bit of a crush on you) and we had been diligently setting aside some money every pay to build it up. It hadn’t reached the max, but it was enough to see me through until the insurance kicked in and I could pay off the mortgage and do some planning for the future.

So my mortgage is paid off Gail. My children can eat and sleep in their own home. I’m still crying about my husband being gone, but I’m not stressed out because, as you say, I had money in the bank so I had options.

Thank you, thank you, thank you. You have no idea how you saved us. The baby is almost here and we have something to look forward to as a family. A joy in among the sorrow. Bless you Gail.

People always seem to think that bad things don’t happen to good people. It isn’t true. Crap happens all the time. Thank goodness the message is getting out and people are starting to take this part of their financial plan more seriously.

The question to ask yourself is this: How long could you last without a paycheque? If you were to get sick, or if someone you loved needed to be cared for, how long would you last without a paycheque? If you were downsized, right-sized or wrongly dismissed, how long would you last? If you tripped and fell, broke your wrist, your leg or your back and couldn’t work, how long would you last?

Remember, when we talk about emergency funds, we’re talking about the most basic costs being covered: rent/mortgage payment, property taxes, utilities, car payment, insurance of all kinds, food, debt repayment. You can cancel the cable. You can find free fun.

Some people consider their lines of credit to be an emergency fund; that might even have worked for the woman who wrote this letter because she had a substantial life insurance settlement coming. Most of us don’t have a pool of cash ready to flow in and pay off a line. So using a line means digging a debt hole. Short-term solution; long term problem.

If you haven’t started to save your emergency fund yet, I hope you never have need of one. But if you hit the wall and have no money, you can’t say you weren’t warned.

This guest post comes from Cassie Howard at MrsJanuary.com. Cassie’s website updates daily with new Canadian deals, coupons and freebies. She also posts personal finance and frugal living articles. See the end for a contest. Ooooh, a contest!  Here’s Cassie:

When the holidays roll around, how do you feel? Excited? Nervous? Stressed out?

If your answer was stressed out, or even nervous, join the club. Many people feel this way when the holiday season hits. How will you pay for presents? Can you afford to host a Christmas party this year? Some of you may even still be paying off last year’s credit card bill!

The good news is that it is possible to enjoy the holidays and not break the bank.

Use coupons: Coupons are an amazing way to save money. You can save on all of your holiday food items – but why not take it one step further and save money on cleaning products, health & beauty items and food for your pet(s), as well? It’s not that hard to use coupons in Canada, I promise.

There are so many places available to find coupons. They’re not just in newspapers, anymore!

Online Coupon Companies: Websites such as save.ca, brandsaver.ca, gocoupons.ca and websaver.ca are amazing resources for coupons of all varieties. You can find cents and dollar off coupons for food items, cleaning products, health & beauty items and many more. Sometimes these sites even have coupons for FREE items – just order the coupon and redeem it for the free item at a store near you.

Tear Pads: I find many of my coupons from tear pads that you can find in most grocery stores and pharmacies. On your next shopping trip, take a closer look at the shelving and display cases and you’re likely to find some valuable money saving coupons. You can use them right away, or you can take a few and put them aside until a great sale comes along.

Newspaper: Of course, you can often find coupons in your weekly newspaper. However, unlike in the US, you will not find coupons every single week. You can expect to find Smart Source coupon inserts every 3 weeks, Redplum every 4 weeks and Brandsaver every 3-4 months (sometimes more often). Want to know which newspapers carry these coupon inserts? Where to find Smart Source & Redplum coupon inserts in Canada. (You can find Brandsaver inserts in these papers as well.)

Printable Coupons: There is a bounty of Canadian printable coupons available to consumers nowadays. You can find them by visiting the websites of your favourite companies, or you can visit the link above to see my long list of current printable coupons available to Canadians. Please keep in mind that you can not photocopy printable coupons!

You can also find them on or inside packaging of products you may already be purchasing (such as cereal, milk, taco kits and more) and by emailing the companies of products your family regularly uses and flat-out asking them for coupons (they will usually say yes, and mail some to you). You can even get great coupons from your dentist? Simply ask if they have any to spare at your next visit.

Coupons really are everywhere when you actually start paying attention and actively looking for them. By investing just a bit of time once a week or once a day and seeking out new coupons to use, you can definitely use them to your advantage and save some serious money on your next shopping trip.

Interested in winning a copy of Cassie Howard’s eBook Money In Your Pocket? Leave a comment on this post, letting us all know how you save money during the holidays. Two winners will be drawn this week.  This contest is available to residents of Canada only.

When I asked the question, “How much do you have in your emergency fund?” 28% of you responded, “What’s an emergency fund?” Oy! People, if you don’t have an emergency fund then the first time life craps on your head you’re going to be pushed to use credit… creating another emergency down the road.  Only 17% of the over 500 people who responded have 6+ months’ of essential expenses covered. Those are the people who know that money in the bank means you have options in terms of coping with whatever curveball life throws at you. But you’re working on it, I know. 25% of you have a month’s worth of essential expenses set aside, another 20% have 2-3 months’ worth, and 10% have 4-5 months’ worth. Keep it up. The peace of mind is priceless.

You’re working on building up those retirement savings too. When I asked, “What percentage of your salary will you put towards your retirement savings this year?” you said:

• 13 % of you said 16%+
• 18% of you said 11-15%
• 24% of you said 6-10%
• 32% of you said 1-5%
• 13% of you said nothing.

Loads of you are optimistic about your retirement savings. 27% of you have a cood company pension plan and another 19% of you think you’re in great shape. That’s almost half of you who aren’t worried at all. 17% of you say you’ve just started saving, but you have lots of time. Well done. 21% say you’ve just started saving and hope you’ll have enough. HOPE! Hey, when you live in that grey zone, it’s got to be weighing on you mind. Find out more about how your plan is working so you have time to tweak it if you need to. Sadly, 16% of y’all aren’t in a happy place when it comes to retirement.

Many of you seem to like the TFSA. Of the almost 450 people who voted on this poll, 28% had contributed the max. The rest of you did the following:

• 8% contributed between $4,000-$4,999
• 4% contributed between $3,000-$3,999
• 5% contributed between $2,000-$2,999
• 8% contributed between $1,000-$1,999
• 12% contributed less than $1000
• 35% contributed nothing.

Most disturbing in these stats were the 10% of people who responded, “What’s a TFSA?”

Have you been living under a rock?

Saving doesn’t always mean giving up something you like to buy. Sometimes you can buy the things you really want just be being aware of how you’re using your money. Andrea says:

When I reach the maximum EI and CPP contributions for the year, I take out those amounts each paycheque and put them into a short-term savings account. I got the idea when I realized that there was a maximum yearly contribution because I don’t want to get used to having the extra money in my chequing account, only to have that extra money go away when the contributions restart in January.

The amount depends on how much I get paid every year, but the EI saves me about $500-550 and the CPP about $250-300.  The EI money is earmarked for Christmas; I figure out how much money I will save from EI and that becomes my Christmas budget. When the bills come in January, I just have to transfer the money over. It’s a really nice feeling.  The CPP money is for splurges. Sometimes I have a specific goal in mind, but usually it turns into pretty dresses and shoes.

When you have kids, the money you spend can seem to be endless unless you keep a firm hand on your budget. Save in one place so you can spend somewhere else that’s a bigger priority, like Anna does:

We have a family of four and $500 per month for all groceries and personal care items.  Because 2 of the 4 are toddlers and very messy, I do a lot of laundry so I found a recipe for homemade laundry detergent.I calculated that it costs less than a penny per load.  I found the recipe online while looking for cheap recipe ideas, it was in one of the side bars and I had an epiphany. We end up saving about $21 per month with this strategy.  We’re able to afford infant cereal so I worry less about them getting the correct nutrients and every so often we buy me a pack of Boost when it’s on sale.

Teaching children to save is an important part of their financial education, especially if you want them to be smarter about their money than you were. So says Melanie:

My husband and I had to learn our money lessons the hard way.  We are determined not to let that happen to the girls, we are trying very hard to empower them to make smart money choices.  When we give them money for chores, they have to put some in a special trip piggy bank (to save for road trips), they have to put some in a saving bank for their bank account and then they can spend what is left.  Last May when we took a trip to Montreal, they both had lots of spending money and were motivated to save even more when they hot home. Wish we had learned that at their age.

Saving is also all about knowing what’s important to you. Trying to have it all at the same time can destroy your financial plan; knowing what you can do without… that’s key to getting what you think IS important. Here’s Michele:

Okay, call me old-fashioned but I have so far resisted getting a ’smart phone’.  I just can’t stomach the cost of the contracts.  My husband has an iPhone with a minimum monthly charge of $60 and a contract of 3 years, at a cost of $2160 overall.  I on the other hand, have a phone that only costs me $25/month and an iPod Touch.  The only thing I give up is the 3G connection – I have to be somewhere with WiFi to get the internet. And I’ll have saved about $800.  And I’ve had this phone long enough to run out my contract and Bell still has to honour those same charges.  I don’t think they even offer contracts that cheap anymore! So that’s one way I save money.

The other is to avoid getting a fancy car.  We got a great, reliable Hyundai from the repo lot.  Saved a heap of money, about $3500 because we also found one that had been scratched up – we suspect it was done by the original owner, when he discovered his car was being repossessed.  By paying less than $7000 for a 5 year old car, we saved a heap of cash.  And we were able to pay cash for the heap!  We live in Calgary, where hail is a guaranteed annual occurrence.  And hazard.  We haven’t repaired the hail damage to the top of the car, since the scratches were already there.  So, yes the car looks a little like some college student’s beast, but it’s paid for, runs like a top, and nobody’s going to steal it!

These are not glamorous ideas, but they’ve worked for us.  And by the way, our total debt less than 30% of the value of the house we live in – and we’ve lived here for only 3 years.  Plus we have another house, of equal value which is rented out right now.

—————

Kelly, you won Tuesday’s prize. Tara, you won Wednesday’s. I’ve given your emails to Cassie to contact you directly.

Today is Day Four of the giveaway of Casssie Howard’s (MrsJanuary.com) Money In Your Pocket, which focuses on saving money on your grocery bills. To enter, answer the question of the day in the comments. Today’s question: What’s the biggest single savings you made on something you bought, and what did you do with the “savings”?

Well, I probably won’t have the most heart-warming, or clever saving strategy, but I’ve never been more proud of myself for following through with this and I am about the enjoy the rewards of my saving very soon, so I am at the peak of my excitement and would love to share it with you!  After all, your advice has really been what has helped me achieve all of this.

It all started towards the end of last summer.  My husband and I had moved into a brand new home on an acre lot the previous fall.  Leading up the move, we had suspended our ‘extra’ debt payments, using the money instead to enhance the house we were trying to sell (it worked!) and then for moving costs.  We planned to restart the extra payments once we were settled in the new place; however, it was about 8 months later and we had only partially gotten back on track (thank goodness this letter isn’t about looking after your budget while buying a home, or else I wouldn’t have much to brag about…but we all make mistakes right?).  So it was near the end of summer and I  had 3 goals in mind: 1) We needed to get back on track and finish getting the rest of our debt paid off ASAP (1 student loan, 1 student line of credit and 1 miscellaneous line of credit that had been paid off and then spent a couple of times), 2) Looking at this acre of land I owned that was inhabited by mostly weeds and a bit grass, I longed for a nice landscaped yard with an interlocking stone walkway up to the front door (may seem trivial for some, but this was my dream…whatever floats your boat right?), 3) My husband had a business trip to Italy planned for the following Spring, I love to travel and HAD to travel with him or else I would be miserable.

I employed 2 strategies: 1) I decided to make more money.  I already work full-time in health care, specifically in public health, but I really wanted to put my clinical health care skills to work, so I took sought out an opportunity to work for a long-term care home on a contract basis…as a contractor I get paid for a set amount of hours each month and I make my own schedule (so I work a few evenings and a few weekends a month). Since we both already had well-paying full-time jobs, this income was all ‘extra’.

2) I tried to use our 2 lines of credit as our own personal ‘manulife-one’ style accounts.  First I calculated how much extra money we had available to use as extra debt payments and how much we could save per month for each of my ‘planned spending’ goals.  I divided all of this money between our 2 lines of credit and put large extra payments on each of them every month.  I also looked at our bank accounts at the beginning of each month and transferred all the money that was left over from the previous month into the lines of credit (we obviously cut back on ‘life’ where we could to end up having a bit of money left at the end of each month, but we didn’t deny ourselves too much).  Christmas was a very small event, and our tax refunds went directly onto the LOC’s.

So, by the beginning of this month (April 2011), we totally paid of both LOC’s ($16,543.43 in total).  The money I would have paid on the LOC’s in May and June is now allocated to my Italy trip and my landscaping: $7500 total!  I have set aside some additional $$ from my monthly budget to go towards some more of the landscaping over the course of the summer if needed.  I’ll be leaving for Italy on May 20th to accompany my husband for 2 weeks, and I’ve already started looking into some landscapers.  It’s so amazing to actually see the end result of all my hard work!

What happens after June you ask?  Well, the debt is not finished yet.  I am planning to tackle my husband’s student loan and increase the payments so that it is paid off by April of next year (we chose to save this debt for last because we get the interest back at tax time).  I’m definitely committing to not using the LOC’s anymore.  I’m also going to use some of the extra money to bump up our emergency savings and start putting money aside for a vacation in Fall 2012…so that my husband can actually go on a real trip, not just a business trip  Obviously, I will be keeping my extra job…planning to keep it at least a few more years until I’m ready to start a family.

My husband and I were expecting our first baby and we wanted a video camera to capture all those precious moments.  My husband is a loyal coffee buyer and he always prefers to use bills at the drive thru instead of change.  The change had already started accumulating in the car so I started to take the change from his coffee runs and store them in a tin can.  Within 6 months we had just over $650 and we were able to buy a really nice video camera.

The best part was that neither of us felt deprived and it was an easy and lazy way to save without feeling it.

Lana says: I google coupon codes for whatever online store I am shopping from (I rarely shop, but sometimes you just have to). The last item I bought I saved $25 (a 1/4 of the total cost) by using a code I found in just a few clicks of my mouse. The “savings,” well, every penny that’s left at the end of the month goes onto my debt repayment.

Lori says: Shop in your closet! Get in there, clean up the clutter and fix the items you have so that you don’t need to spend more money on similar items. Then you can put that money towards debt or investments. I am trying to do this myself, to only buy necessary items or accessories to jazz up what I have already for the next year.

Kimberley says: I am a frugal person and try my best to stay within our budget and maximize our savings. One of my best money-savings tips is to get rid of a smartphone! I had a blackberry and was stuck in the middle of a 3 year contract, I called the phone company and told them my blackberry was broken and I would be switching back to my old (regular) cell phone. My monthly payments have decreased by 2/3.

I intend to cancel my cell phone contract once it is up for renewal, I will then simply have a pay-as-you-go plan and use it only for emergencies. My husband’s cell contract was up, and he canceled it entirely as he has a work cell phone that he could use in emergency situations. We have filled the ‘gap’ by getting a landline in our home, which we ‘bundle’ with our tv package (the minimum, basic package) and internet (the cheapest option) – the bundling has saved us an additional 15% on our services.

Cell phones/ smart phones, cable, and internet often add a large monthly bill to households. It is an area that could easily be cut back without anyone’s life being any less enjoyable (while reaping increased cash flow available to pay down debt or invest in savings)!

Sometimes to find the money to save you have to give up something you thought was important. But if you can find the right motivation, it’s amazing what you can part with. Just ask Ivan:

We had around $10,000 of credit card debt left but we were not moving along as fast as we wanted. We had two cars that we were paying for, one of them was BMW which cost us $655/month plus insurance, repairs! So we decided to sell the car and manage to live with one car. Luckily we sold the car the next day it was listed, we broke even with what was owed on it, however we freed a lot of money to improve cash flow and attack the debt with vengeance.

Total we ended up saving just over $9,000 in one year!

Credit card debt is gone and now we are a full steam ahead with saving money for the house down payment. We have no debt now except condo and school loans (which are getting paid off much faster now).

And sometimes the thing you thought was important is too small to really make a difference, so you just don’t bother. But you should. Ask Heather:

Love your show. Love your no-nonsense approach to money management. With your tips we will be out of debt in 10 months!

Saving Strategy: Frustrated by my husband’s Tim Horton’s habit, I decided to put that change to better use. He was given a small coffee maker and nice coffee for a Christmas present from my mother. January 1st of this year I started a

‘Twoonie Tin’. My goal was to put a Twoonie away for the five work days he would have bought a coffee. My original goal was to save up $500 by the fall for our Christmas fund. In the past we had just juggled the money to come up with enough to cover the presents.

Savings So Far: As of last night (April 25,2011) we have saved $440 just in Twooines.

These Savings have not yet been spent. By the fall we should have around $1000 at the rate we are saving. This will cover all of the Christmas presents as well as a weekend family holiday.

This might be small potatoes compared to some people, but it is a huge leap for us. In the distant past we did not budget for the expense of the holidays. It is such a relief to have this covered without taking away from any other expenses.

Our saving strategy is to aggressively pay off our mortgage so that I could take time off work to stay home with our children.  We opted for a mortgage with the option of increasing payments by 20% per year and making a 20% lump sum payment per year.  We’ve only been able to make a few lump sum payments and never the full 20% but we’ve always increased our bi-weekly payments by 20% per year.  We truly haven’t felt the increase because it comes directly from our bank account.  I think of lot of people don’t believe that doing this is possible but people waste so much money on truly needless things – eating out, spa treatments, shopping splurges, etc.  I enjoy these things but always within our budget.

We’re literally saving thousands of dollars in interest by paying off our mortgage within 10 years instead of 25 years.

Our mortgage will be paid off by December 2011 and with this I will be able to take 5 years off of work to stay home and be with my children.  We are expecting our second baby in July and being able to take this time off without the burden of a mortgage or any consumer debt is the best decision we have ever made.

It’s amazing how create people get when they want to find ways to save. While it might not be a strategy for everyone, Karen and her partner have saved on their fixed expenses so they have more for the things that are important:

My name is Karen, I live in very expensive Vancouver, BC with my partner Viktor. Over 7 years ago my partner and I rented a 5-bedroom house with another couple, after living together for a year, the other couple moved out.  My partner and I wanted to stay in house and couldn’t afford the rent alone.  We decided to furnish 3 bedrooms and have roomies share the rent for a flat fee (including the often fought over toilet paper).  After 7.5 years, 40 + roomies, and over $150,000 in rent paid, we’ve managed to pay less than 30% of the rent from our own pockets – a savings of ~$100,000.  Granted, we paid some up front costs and up keep of furniture (all used & often given to us from friends), a second fridge, a freezer and laundry facilities which cost us ~$5,000.  Over 90% of the roomies were great and we never had huge issues with anyone who lived with us.   We used the money saved to give us both time to explore career opportunities, time for longer and more frequent vacations and increasing our savings.  Maybe one day we will buy our own home and continue with our money saving strategy.

Sometimes when you want to save for something specific it means you have to make more money. There can be some big side-benefits to a second job, as Danielle and her husband found out:

In order for us to save more money, especially when we were saving for our wedding, my husband took on a part-time job: mystery shopping! We came up with that particular strategy indirectly: in addition to my own full-time job, I began coaching figure skating part-time, so I couldn’t make any more than I was. My husband mentioned we wanted to earn more money and put is joy for writing into use. I suggested mystery shopping, something I’d looked into when I was a student. Based on that one company that I’d suggested, he enrolled and found another 90 companies in North America and has now been paid by approximately 40 of them. It was nice that we was able to continue to earn some, although not as much, when he lost his job in the Dec 2008 economic crisis, maximizing his EI benefits.

Some of the jobs provide direct cash payments and we’ve used that to pay for items like his cell phone bill and gas as they are necessities of the job. But some of the jobs simply provide the benefit/item consumed and here are a few examples of what we’ve been able to do for free or getting a very big discount:

• 3 Toronto Raptors games
• 1 Toronto Maple Leafs game
• concert at the Air Canada Centre
• 60% off stay at the King Edward Hotel in Toronto for our 5th anniversary (pre-wedding!)
• return train ticket, Toronto to Montreal
• gas and food while traveling throughout Ontario
• 50% off 1 night at a hotel in LA during our honeymoon
• countless free dinners at a variety of restaurants
• numerous free bowling outings
• groceries, clothes, christmas gifts, etc

As the savings we’ve earned with this strategy aren’t long-term oriented, we’ve been spending it as it comes in. In approximately 3 years of work, with just the cell phone ($50) and a conservative estimate of 1 gas refill per month ($50), we’ve been able to “save”, i.e., apply $3600 towards are debt we’d otherwise not been able to. Thus an estimate of amount saved is difficult to discern.

So the savings we earned first allowed for us to pay for parts of our wedding, but mostly it has provided us with the luxury of going out-and-about, sometimes doing things we’d never pay for out of pocket (like the Raptors and Leafs games) while working extremely hard to pay off our debt (12 more months to go to being debt free forever)!

I love Til Debt Do Us Part! I watch it all the time on Slice! I am 25 years old and my goal last year was to traveltraveltravel! My partner and I were living in the very expensive town of Whistler, BC. We wanted to save but still enjoy the mountain fun. Whistler is packed with outdoorsy people, which means LOTS of gently used outdoor gear. We bought all of our skis, outerwear, snowboards and gear either through Craigslist or on serious discount during the summer. We were able to enjoy the mountains using on (work discounted) passes and used gear! From the money we saved we were able to save more than $10,000 in 4 months!

With the money we travelled India, Thailand, Vietnam, Cambodia, Laos and Australia. Once we landed overseas, our thrifting ways continued…looking for the best deals for tours, accommodation, and transportation. We got great a bartering!

See what you’re paying on something that’s financed… even your home… can be a huge motivator to knock down the interest cost. Just ask Marilyn:
When we initially entered into the mortgage for our home, our mortgage broker gave us two schedules.  One was a schedule showing the minimum payments for our term with the full amortization of 35 years.  Another was our planned schedule for comfortable payments set at more than the monthly minimum.  Both showed the amount of interest we would have to pay for the term.  The amount of interest on our planned schedule still made me uncomfortable because of my debt “allergy”.  The interest, added to the amount of the mortgage, makes the total cost of living in a house quite pricey!

Our saving strategy is to throw “found” money at the debt.  Found money is any money that is above our usual paychecks.  From our reward cards, we’ll get cash back, groceries, gift cards, etc.  Since we would spend the money on groceries, gifts, etc. and those amounts are already worked into the budget, it goes towards the mortgage instead.  RRSP money is automatically deducted from my paycheque, so when the tax refund comes in, it goes to the mortgage.  Ditto rebates like the home renovation tax credit, the recent Bell Canada rebate, etc.  When our collection reaches the minimum we need to make a payment, we make a payment.  If the amount is close, we’ll split the difference and bring it up to the minimum.

Since January 2010, we’ve “found” over $5500 to put towards our mortgage and the amount keeps growing.  That translates to reducing our mortgage by 9 months or three months short of a maternity leave.  Since we may be anticipating an addition to our family within the year, it’s a welcome cushion to our budget.

Nothing says we can’t use someone else’s good idea (which is what this series of blogs has been all about). And if it’s our Mom’s idea, we get extra points for being smart! Like Laura:

I have to admit, this idea isn’t mine … my mother’s been doing this for years to boost her savings.  And, boy, am I glad I listened to her.  I think most people create their budgets in January … when they’re all revved up with New Year’s resolutions, but I actually go over and revise my budget in July.  This is because at my work our annual raise is communicated to us in June and is effective July 1st.  Why is this important?  Because, following in my mother’s footsteps, I look and see if I can manage on my current income (without the raise) for this year’s budget and if I can then I put all of my raise into savings (either into RRSPs or a separate savings account for something specific, or both).  The way I figure, it’s not money I’m needing, so it’s like ‘free’ money for savings … and the best part is, I set up automatic payments into my savings account on payday so I don’t even see the increase in my pay that is deposited into my regular account, but my savings accounts do.  It’s hard to say exactly how much I’ve been able to save using this method, only because when it’s used for RRSPs then my refund from my annual tax return is a bit higher and such, but I do know that when I was saving for my trip to NYC this year it was painless and my entire trip is paid for with money still in my vacation account for next year’s trip.  But if I had to guess I’d save I’ve saved thousands over my career … I’m 35, own my own home, car, I travel all the time and am debt free.  I’m so happy I listened to my mom and took her advice.

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WOW! What a response I got to yesterday’s post. Okay people, I hear ya. LEAVE THE FICKIN’ BLOG ALONE GAIL! ‘zat pretty much it?  So I’ll stay the course, perhaps choosing a day of the week to explore some new areas, but continuing to service your needs for butt kicking and honesty in all areas financial. You’re a funny bunch and I think y’all are fabulous! Such an honour to serve you. BIGGEST hugs.