REXDALE, TORONTO – The economy may be unstable, but you can still take the right steps to secure the bag! Have you been trying to save money? Maybe you’re looking to buy a house, a car, or just stack yourself a rainy day fund. Well, this week Faith Biyapo from TD Bank Group is giving some top tips on how to actually save your cash.
When we spoke to people on the street, some said they were good at pinching their pennies, while others shared their struggle to save.
“If you have a monthly income, definitely want to budget what you want to spend, what you want to save, and what you want to invest. A good ratio is 60, 30, 10. Save 30, invest 10, and with the rest I gotta make sure all my needs are met,” explained one man.
“Just try to save about 10%. It can go a long way whether you want to put it in a savings account or you want to put it into stocks,” said one woman, who claims to save $500 from every paycheck.
While another young woman said that she can’t help but spend.
“I try to, but the money just slips out,” she laughed, saying that she tries to save but finds it difficult with her bills eating up her money.
Nonetheless, having some savings is essential.
Why Having Savings is Important
“Over time, things happen in our lives. There are unforeseen circumstances that may come up. A family member may fall sick. You yourself may fall into a situation where maybe you’re in between jobs and you need something to fall back on,” Biyapo explained.
Biyapo says that first, people should create a budget that breaks down how much of their paycheck will go towards expenses like rent and groceries. Then you will be able to better determine how much money you can realistically save each month.
“Once you do have a better sense of how much you can put away, you can set up a preauthorized transfer,” he explained, adding that preauthorized transfers can also be set up for Tax-Free Savings Accounts.
He also recommends speaking to a financial advisor.
“They will educate you on the different investment vehicles that are available to you at your level, depending on where you’re at in your life’s journey,” Biyapo told Brandon.
Financial advisors can also help people with TFSAs invest their money to help it grow.
While some of us are already savings savvy, there are a ton of people out there who are struggling to save even 10% of their paycheck. New shoes, the latest technology, and other luxuries can tempt even some of the strongest savers. Don’t worry, Biyapo has tips for you, too!
Work on Budgeting, Biyapo says
“I think that’s where having a budget comes into play. It’s very vital that you have a budget because it helps you understand how much you need to cover your living expenses every month,” he explained.
“Then you have what is left, which is discretionary income,” Biyapo added, explaining that money left over could be used for the latest cellphone, or it could be saved.
“Once you cover your living expenses, it’s advisable that you try to save what is left. It’s important that you are able to differentiate between what you need, and what you want,” Biyapo said.
People in the streets guessed that they should have anywhere from three to 12 months of savings in the bank. Biyapo says that it depends on your lifestyle, income, dependents, and expenses, but an emergency fund should be anywhere from three to six months.
Faith Biyapo explains the importance of the Black Customer Experience team at TD, shares advice on savings advice for students, and gives us all the details about an incredible TD Leadership Scholarship for $70,000 on this episode of Building Better With Brandon!