Getting Ahead Through Small Steps

Banking Basics

Regardless of your financial situation, evaluating one's day-to-day cash flow is a good way to start. In particular, begin thinking about how you might save a few dollars here and there by spending only on what you value. It really comes down to finding that $5-$10 a day that can be saved. Remember, it's all about small wins.


Being creatures of habit, we all have our routines. Some of us like to start each day with a luxury coffee. Others grab a bottle of water, or pick up a magazine in the afteroon. What if, instead, you were to take those five or six dollars and save for your future? You'd be surprised how quickly those amounts add up. In 20 years, you'd have over $50,000 just in savings.1


Bar graph demonstrating what $5 a day can earn you


1Sample savings are based on saving $50 bi-weekly ($5 a day saved 5 times per week) in an RSP, earning a 7% annual rate of return, compounded annually.

The idea is to identify those expenses that may not actually add value to our lives, spending only on what we value, and then start putting that money aside for what is important to us - such as saving for a comfortable retirement.


The Find the Money Challenge

To start, track your expenses for a few days to get a better idea of where your money goes. Then ask yourself if you really need to spend that much on coffee, bottled water, magazines, chocolate bars, parking, and the like.

The next step is to start eliminating the nonessentials - the things that you can live without - without denying yourself the things you enjoy. While you're at it, why not consider how you can find small savings on your larger regular expenditures, such as cable TV or health club membership?

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