Tried-and-true methods

1. Try the 50-30-20 budgeting rule

Creating and following a budget is one of the first and most practical approaches to saving money. The 50-30-20 budgeting rule, where 50% of income goes to needs (like rent or mortgage and your fixed bills), 30% to wants (entertainment and travel), and 20% to savings and debt repayment, makes budgeting, managing expenses and saving much more manageable. Budgeting tools like YNAB, which stands for “You need a budget,” can help Canadians track their spending, identify areas for improvement and spend within their financial limits. Additionally, the site offers a user friendly interface, with easy-to-navigate budget, goal and spending sections. It can be accessed on a smartphone as well for smart personal finance on the go. Sign up for a YNAB account — with prices ranging from $14.99 USD per month or $99 USD yearly — and enjoy the benefits of free courses on things like managing debt and how to create a budget.

2. Automate your savings

Automating savings by setting up regular transfers from your checking account to a high-interest savings account (HISA) or a Tax-Free Savings Account (TFSA) can help you save consistently without relying on willpower. Plus, this method uses “out of sight, out of mind” thinking, which many people find beneficial for saving money—and not being tempted to spend it.

High-interest savings accounts that offer comeptitive interest rates and bonuses for direct deposits are a surefire way to make the most out of your contributions. The EQ Personal Account currently has an interest rate of 2.50%, but that increases to 4% when direct deposit is set up. This is one of the best non-promotional interest rates in Canada right now. Beyond making you money, you will pay no monthly fees and there’s no minimum balance to maintain. Account holders also have unlimited transactions and free electronic fund transfers, mobile cheque deposits and bill payments. Unlimited free Interac transfers are also included.

3. Cut unnecessary (or under-utilized) expenses

Reviewing your monthly expenses and eliminating non-essential costs can free up more money for savings. To do this, you’ll want to take a close look at:

  • Unused subscriptions or free trials that rolled over under your radar
  • Do an analysis of your monthly UberEats or DoorDash spending and how much you’re spending dining out
  • Shopping for essentials only (buh-bye, impulse purchases!)
  • Review how many premium streaming services you’re currently paying for and considering whittling it down to just one or two or rotating them through the year

Even $200 recouped from this section of your regular spending can go a long way when you re-route it into a high-interest savings account every month and watch it grow year over year.

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Innovative solutions

4. Use a digital money jar

In the digital age, tools like Varo, HyperJar, MoneyJar and QubeMoney offer a modern twist on the traditional cash envelope system you’ve probably seen all over TikTok.

Digital money jars allow users to allocate funds into various spending “buckets” — think fixed and variable expenses, savings and debts — and set savings goals, track expense, and receive personalized financial insights in a secure digital environment. With these modern and ultra-visual digital platforms, Canadians can prioritize savings, control spending and manage finances better.

5. Comparison shop

Before making purchases, use price-comparison websites, promo codes, cashback offers and articles to ensure you get the best deal. Apps like Rakuten, Honey and Shopbrain can help you save money by finding discounts and cashback opportunities from various retailers. It may require an extra step, but it’s worth it.

6. Capitalize on cashback and rewards programs

Utilize cashback apps, credit cards with rewards programs and loyalty programs to big on everyday purchases. Many major Canadian banks land fintech alike offer credit cards with cashback features.

While these are a great way to build your savings, there are numerous other ways to earn points on essentials like groceries, gas,and bills. Air Miles, Aeroplan, as well as travel programs like Marriott Bonvoy offer substantial savings in the long run on items you regularly purchase. Not capitalizing on these is a missed opportunity to maximize your savings and enhance your overall financial picture.

The TD Aeroplan Visa Infinite Privilege stands out amongst its competitors thanks to its generous rewards earn rate and expansive travel benefits and insurance protections.

Earn rates: Earn 2 points on eligible gas, grocery and direct through Air Canada purchases (including Air Canada Vacations), 1.5 points on eligible gas, groceries, travel and dining purchases, and 1.25 points on every other purchase

Travel benefits: Maple Leaf Lounge access, priority boarding and baggage with Air Canada, first checked bag free with Air Canada, NEXUS application credits and preferred pricing with Air Canada

Insurance coverage: Extensive coverage, including travel accident insurance, baggage delay, trip interruption/cancellation insurance, rental car coverage, hotel burglary insurance, extended warranty, price protection and more

The MBNA Rewards Platinum Plus Mastercard is an overlooked gem among rewards cards in Canada and could be an ideal fit for anyone who is averse to paying an annual fee and whose biggest spending categories are groceries, restaurants, subscriptions and utilities.

Regular earn rates: 2 points per $1 spent on groceries, restaurants, digital media, memberships and household utilities after the first 90 days ($10,000 annual spending cap in each category); then, 1 point per $1 spent on everything else

Birthday Bonus Points: In your birthday month, you’ll receive an extra 10% of the total points you earned in the previous year (max 10,000 Birthday Bonus Points annually)

7. Embrace the “sharing economy”

Getting on board with the sharing economy in Canada can provide significant savings on various expenses. For example, utilizing platforms like Airbnb for accommodation, Uber for transportation and Turo for car rentals can result in substantial savings.

By opting for ride-sharing services like Uber instead of owning a car, Canadians can save thousands of dollars annually on vehicle depreciation, maintenance, insurance and gas costs. According to a recently updated report on Ratehub.ca, the average annual cost of owning and operating a vehicle in Canada is $1387 a month and $16,644 annually. By utilizing ride-sharing services, Canadians can save a significant portion of this amount each year and re-allocate it to savings, debt repayment or a much-deserved vacation.

Bottom line

One of the best ways to save money is to blend traditional and innovative budgeting strategies. The trusty 50-30-20 rule, automating your savings, cutting frivolous expenses, using digital money jars and participating in the growing sharing economy are all brilliant ways to boost your savings. With these seven tips in your toolkit, financial well-being and a more secure future are within reach.

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Alicia Tyler Freelancer Writer

The Toronto-based journalist has over 18 years of experience as an editorial leader in digital and print media, specializing in consumer and service journalism. Her work has appeared in MoneySense, MindBodyGreen, Clean Eating, Yoga Journal and more. You can contact her via aliciamtyler.com.

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