7 Ways to Save Money You May Not Have Tried

1. Take out a loan to defeat your debt

It sounds counterintuitive, but taking out a loan could be a critical first step to becoming debt free.

When the pandemic struck, many families relied on credit cards to get them through the following months. It’s a fine short-term survival strategy, but the brutal interest rates on credit cards — often topping 20% APR — can bury you over the long term. Payday loans are even worse.

To consolidate your debt, you apply for a new low-interest loan and use the money to pay off all of your high-interest bills. You’ll still owe the same amount, but your new rate will help you save you money on interest and potentially free yourself from debt years sooner.

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2. Ditch your traditional bank account

If you’ve got money to spare, you’re probably socking it away in a standard savings account from one of the big six banks. That might seem like a safe strategy, but with every passing day, that money is losing its value.

Traditional savings accounts typically pay a pittance in interest — right now, something like 0.01% to 0.05% — and might even make you pay for the privilege of holding your cash.

To give your money a chance to grow and maintain its purchasing power, look for a high-interest savings account. Some banks — especially digital banks that don’t have to pay for physical branches full of employees — are offering interest rates as high as 1.25% APY. That’s more than 125 times as much interest as a normal account.

3. Let a robot do your budgeting for you

Even if you make a mental note every single time you open your wallet, it’s hard to keep track of where all of your money is going.

Mortgage payments, car payments, insurance bills, utility bills, credit card interest, streaming subscriptions, investing fees — a lot of money vanishes every month to these automatic expenses.

To keep track of your active and passive payments, consider using a free budgeting app, like Marble. In addition to help managing your debt and credit, the app analyzes your banking activity and provides a detailed breakdown of all of your monthly income and spending.

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4. Trade houses — or at least mortgages

Moving may seem like a drastic measure, but some of your neighbours are probably mulling it over. An American study late last year found just under half of respondents were considering a move to reduce their living expenses.

Living just a little further away from an urban centre can make an extraordinary difference. Depending on where you live, a $500,000 home could be a stunning mansion or multifamily investment property — or a one-bedroom condo.

But if moving is out of the question, you may still be able to save thousands over the coming years by refinancing your mortgage with a lower interest rate. Conditions can't get much better; the Bank of Canada has kept its interest rate target at the "effective lower bound" since the early days of the pandemic.

5. Invest your ‘spare change’

When your budget is tight, investing for the future is probably the last thing on your mind. But given enough time, even pocket change can become a source of wealth.

Take willpower out of the equation by using an app to automatically invest spare change from your day-to-day purchases. Say you buy a doughnut for $2.30 — the app will round up the cost to $3.00 and invest the 70 cent difference in a premade portfolio.

Saving a few cents at a time may not seem like much, but $2.50 worth of daily round-ups becomes $900 in one year — and that’s before counting the additional gains you could make in the market.

6. Make your good credit score great

If you have pretty good credit, it's easy to forget you have a credit score at all. No lender is going to decline your application.

But if you want to make absolutely sure you're getting the best interest rates when you borrow money, an excellent score is like having a VIP pass.

Not sure where you stand? These days, it's easy to take a free peek at your credit score online.

If your rating is less than impressive, now’s the time to boost it to ensure you’re not missing out on big savings when you finance a home or a car.

7. Get paid for making the same old purchases

They say there’s no such thing as a free lunch, but this is getting pretty close.

A few rewards programs out there will pay you cash — not points — for everyday purchases, whether it's at the gas pump, a chain restaurant, the drug store or a department store.

It’s as simple as connecting your card, shopping and then cashing out your rewards through a free Interac e-Transfer.

If you were already going to make those purchases, why not earn a little bit back — which you can always use on your next shopping trip.

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