Archive for the ‘Saving’ Category.

2022 Showed me the Power of Emergency Savings and how Financially Empowering it is! 

We have all heard of an emergency fund, where you set a set amount money on the side to use for a rainy day and the unexpected, be it expensive car repairs, medical bills, home issues or anything else that you couldn’t have foreseen and would cost money to tackle. And while most probably have something saved on the side in their emergency fund, they likely hardly ever have to use it (fortunately) and this may lead to a situation where you question whether you even need it or dip into it to pay for other non-emergency items (for example, paying your credit card balance is not considered an emergency and shouldn’t be taken from an emergency fund. 

Luckily (or maybe un-luckily) for me, this year forced me to dip into my emergency fund more than once and most of these were real emergencies. Here are some of what I faced and required me dipping into my emergency fund: 

-various car repairs to a used car that was recently handed to us as a gift from another family member, after our previous one died on us (money used: $3000) 

-various furnace repairs (money used: $1150)

-other home repairs including faucet leaks (money used: $150)

As you can see, through 6 months, we had to dip into our emergency fund some 10 times, totaling over $4000! Imagine if we didn’t have an emergency fund, we would have used our credit card instead and you know what that means in terms of the interest charges that start to accumulate if not paid. 

But there is a better reason to have that emergency fund: you feel good, empowered and proud to have saved for such unforeseen emergencies! That is exactly how I felt. While I wasn’t happy about all these back to back and unexpected home and car emergencies, I felt good when I knew I had money to cover these unanticipated popups without breaking the bank or having to use plastic! 

With these issues now fixed and in the rear view mirror, I have already started to rebuild my emergency fund, to ensure it is back to its previous amount. 

If you don’t yet have an emergency fund, be sure to start saving one right away. Not only will you be happy you did should the unexpected happen, you will also feel good and financially empowered . While it is recommended to have 3-6 months’ worth of expenses saved in your emergency fund, each person and family are different and good start would be to have $2-4K saved.

Creating financial goals can help you get there easier, but there is an even better way!

One of my goals for 2022 is to get active with push-ups. To be more specific, I set to do 10 push-ups a day and increase that by 1 extra push-up per month. So for January, I started with 10 a day and I have since increased that to 11 a day for February. For March I will raise that to 12 a day and so on. The idea is to increase things while not shocking the system. I couldn’t just go from 10 push-ups a day in January to 20 in February. For those familiar with the ‘boiling frog syndrome’ , this should make sense.

You can apply the same ‘ladder’ approach to your finances, be it to save money or pay down debt.

Saving money

You can apply this in many different ways. You can start by saving a specific amount of your net pay and increase it by a specific amount or percentage each paycheque thereafter. Or, you can set it so that you are increasing it by 25% per quarter. So if you are starting with $100 saving bi-weekly in Jan, by April 1st, you increase that to $125, then $156 by July and so on. If this proves complicated , you can stick to the easier method of increasing it by a set amount. Alternatively, you can try out a more interesting method, where you increase your contributions based on the month. So starting in Jan with $100, you increase it to $120 in Feb (since Feb is the second month) and by the time you get to December, you will be saving $220.

Paying debt

Paying debt is similar to saving money, but instead of keeping it to yourself, you are paying it back to banks for borrowing their money. Here, too, it is key to set financial goals and fine-tune them as you go. Depending on your debt level, start off by dedicating a certain amount to pay off toward your balance and aim to increase that periodically. This could be done as aggressively as every paycheck , every quarter of however you want to set it. The key is to increase it periodically. Every increase will go a long way towards paying off your balance quicker, while saving on the interest.

Depending on what your financial goals are, start off by writing it down and being clear about what your current situation is and where you want to be. Next, set a timeline. And finally, decided how much you will set aside and how much to increase it by, and how often. It is magical what happens when you are specific, have a specific timeline, and add the power of compounding to it.

New Saving Idea for 2022: ‘Junk to Health to Wealth‘

I am no slave to junk food. I may eat it once or twice a week, sometimes with the family. But despite it not being a daily habit, it still goes a long way towards causing damage to both my pocket and health, especially with the rising prices for food of late.

So for 2022, I have a new saving goal in mind, which will help improve two hugely important areas of my life: my pocket and my heart, both in an almost literal sense.

Junk to Health to Wealth

The idea is simple: on the days I know I would go out and eat junk (usually over the weekend) I will withhold those purchases and instead save that money. At first, I thought I would just keep the money and spend it on something else, since it was part of my ‘personal spending money’ anyway. But I thought it is more effective if I diverted this saved money to a new saving program or even into a piggy bank. Why? To be able to physically see the result of this diversion initiative. In other words, in 6 months or 1 year from now, I will not only be able to go on the scale and see a difference in my weight , I should also realize some nice financial savings from this junk food boycott or reduction.

Putting it in OKR terminology

If you are thinking this in terms of ‘Objectives and Key Results’ , it could read something like this:

Objective: (based on historical data of how often I ate at junk food places and how much I spend) : To save $500 a year and reduce my weight by 7 lbs for the year by reducing how often I frequent these places.

Key results:

  • Visit max of once a week (from two)
  • Spend a max of $7.50 a visit
  • Skip at least once a month from the remaining regular visits.

If I eliminate my visits from 2 to 1 visit a week , this alone would result into savings of $375 per year, based on 50 weeks. If I can also eliminate one extra visit per month, that is another $90, putting me close to my goal of saving $500 from this ‘Junk to Health to Wealth‘ initiative.

While the numbers look clear and the advantages are numerous, this will not be without challenges and distractions. There will be those random days and weeks where you are out with the family and are too far from home or can’t wait , so you just do the easy thing and buy junk. That is fine. We should almost build those in and try to make up by skipping the next visit to eat junk.

Good luck if you decide to do this and let us in the comments below how it goes.

I was Determined not to Enjoy my Pay Increase

If you get a significant pay raise, what do you do with the extra money? Say you get a 10% raise or $5K, assuming that works out to $175-200 per pay.

Do you just spend it? Do you allocate to a category in your budget? Or do you pretend like you never got it and simply roll it over to your savings?

I don’t know about you and we are all different but I personally did a mix of 2 and 3: assigning some to existing categories in the budget (bills, charity) but the majority went to savings.

The idea is simple and this concept is not my creation by any means: I never had this money , so the idea is to shift it to something else , this way I am not getting used to it. Otherwise, if I started using it for leisure and entertainment, then force to shift it to saving, it will feel more like a pay cut than raise.

If you do put it towards saving, best to automate the process. If you have a saving program through your employer-or better yet one where your dollars are matched- that makes things easier. If not, sign up for a high saving program or an index fund ETF where the long term appreciation could be in the 5-10% range, depending on which one you choose.

Another idea would be to redirect it all to a new long term savings goal, such as saving for a new car, home renovation, a grand vacation plan. That is, the goal is for something that is 3-5 years out, allowing you enough time to build a good chunk. For example, if your 10th wedding anniversary is three years away, and you would like to take the family on a European tour that will cost over $10K, then the new pay raise can be fully shifted to that goal. Automate the process, forget about it and when it is time to book the vacation, the money will be waiting for you, with no need to dip into debt.

As long as your meets and wants are met, there is no reason to keep spending any new pay raise you get. It will almost be like a waste. Instead, save it and you will be happy you did when there is a bigger calling for it. Otherwise you will need to use a credit card and go into debt.

One small decision about what to do with your pay raise can mean huge difference for your future.

Our new and more effective approach to saving for 2017

Our family saving approach has been pretty effective, but we though it can get better, especially if we want to save to buy a new bigger house in the future. Seeing where house prices are heading, it will take a full and committed effort from both of us to save a good chunk for a down payment.

So we came up with a new approach. Instead of saving a set amount from every paycheck, we have agreed instead on how much we want to save for all of 2017 and then deciding how much each one of us (myself and my wife) will save per paycheck to get to that amount. In other words, we reversed the equation!

We agreed that $15,000 is the amount we need to save for all of 2017. We then divided that by 2 and then divided by 26 (bi-weekly) . That means each one of us will need to set aside $288 from every paycheck. Of course, this will be easier when we automate our ‘pay yourself first’ which we already do, but just have to increase the amount. Assuming all goes well, by the end of 2017, we will have a cool $15,000 saved with no much extra effort on our part.

So what is the main difference between this and the way we used to do things in the past? Well, the main difference is that we are agreeing on how much we want to save ahead of time. Before, the agreement was on how much each one will set aside from their paycheck towards savings (around $250) . Obviously, both work, but with the new 2017 method, we can save exactly $2K more which is not insignificant!

In addition to payroll saving deductions, we are free to save towards our goal of $15k using other sources (income tax return, second job etc.) – the point is, as long as we get to the goal, it doesn’t matter where the money come from (through legal means of course!).  This will also mean that some adjustments will have to be made to our budget, but these will be small ones that shouldn’t affect how we spend or pay for things etc.

In future years, and assuming we have the same jobs, and with some salary increases, we can agree on bigger saving targets (i.e $17k, $20k etc.)


If anyone there is already applying this method, please share in the comments below how it has worked for you?


The one letter that confuses so many about TFSA and how to use them properly.

Do you know what TFSA stands for? ‘Tax Free Saving Account’ you say? you got it!

But do you know what that means exactly? well most people think they know, when in fact they don’t.

TFSAs are not only for saving but investing and trading as well

TFSAs are not only for saving but investing and trading as well

Why? the simple inclusion of the letter ‘S’ or the word ‘Savings’ throws people off. People assume and treat TFSAs as a saving account and nothing else. The fact of the matter is, a TFSA can be used in a number of ways to generate, save or invest your money.  For example, any of the following would be technically correct:

TFTA: Tax Free Trading Account

TFIA: Tax Free Investment Account

TFSA: Tax Free Saving Account

TFGA: Tax Free Growth Account

TFA: Tax Free Account

As you can see, you can do all of the above with a TFSA account, be it to grow, save, invest, trade or simply use it as a bank account to deposit and spend your money though this wouldn’t be the best way to use it! The only limitation of a TFSA is that it has an annual limit (for this year it is back to $5,500, after rising to $10,000 for 2015) as well as the fact that any money you gain within a TFSA is not taxable. Of course, there is more things to know about TFSAs, but that is beyond the scope or purpose of this article. The point is, the words ‘Tax Free’ is all that matters in a TFSA. Which is why the word ‘Saving’ in TFSA confuses a lot of people. They think TFSAs are for saving only. While they can certainly be used for that, it is one of number of things we can use TFSAs for.


Trading and Investing

So many people are not aware of this but you can use a TFSA account to trade and invest in stocks, bonds, ETFs etc. In fact, it is one great way to generate money and not have to give anything back to the government in the form of taxes. Let me explain with an example. Let us assume you are a couple and together, through 2016, have a combined lifetime contribution room of $93,000. Let us further assume that you have accumulated $90,000 in TFSA. You can basically use that $90K to trade and invest and not have to pay tax on the money generated from stock appreciation or any capital gains.  Let me use another more specific example. Let us say you use your $90K to buy 3 different stocks, which yield an average of 4.5% in dividends. For the entire year, you will get well over $4,000 in dividend income alone. Thanks to this being done within a TFSA, you won’t have to pay any taxes on this $4,000 that you earned in dividends. If this was a regular account, you would have to pay taxes on this $4,000 in dividends.

The other problem people have, once they are aware of the fact you can use it for trading and investing, is how to do that? Most discount brokers and trading firms allow you to open a TFSA account and trade within it. For example, with RBC Direct Investing-the platform I use-when you open an account, you will have the choice of opening a regular account, TFSA, RRSP etc. In fact, I don’t know why anyone would not use a TFSA account to trade and invest, assuming you have the room to contribute. Using a TFSA for saving purposes should be secondary, unless you don’t like to take any risks and don’t know anything about investing and trading.

So go ahead and make use of your TFSA if you never had before. It will not only save you in taxes, it will allow you to make money.

Can you use your TFSA account to make extra monthly income?

TFSA (short for Tax Free Saving Account) was introduced in Canada in 2009, allowing each individual (18 years of age or older) to save up to $5,500 per year and earn interest on their money, without having to pay any taxes on the earned interest.

TFSA can be a great source of a secondary income.

TFSA can be a great source of a secondary income.

As of 2013, the maximum annual amount has been bumped to $5,500. So in theory, if you were to max out your limit every year, you would now have $31,000 in a TFSA account and not be paying any taxes on any earned interest. As a couple, that is up to $62,000.

With saving interest rates sitting around 1.5 to 2%, you could make up to $1240 in interest annually and not pay any taxes.  That is not a terrible amount after all, considering that we are at historical lows when it comes to interest rates. Imagine how much more can be earned when interest rates inevitably start to climb back up.  But even at these historical low rates, a couple can expect upward of $100 per month in income from tax-free interest on their savings. That is enough to pay for a bill or two.

But it gets better. Despite all the confusion surrounding TFSA, it is not strictly a savings account. It can be used for a variety of other investing purposes. For example, just like an RRSP, you can use your TFSA to buy GICs, mutual funds, stocks, bonds etc. And whatever you earn from these investments, will be tax-free. As long as you stay within your annual limit.

Assuming TFSA are here to stay and their annual limit increases to account for inflation, you could be looking at a more potential income in the future from these tax-free accounts.  For example, in 10 years, TFSAs will have been around for 15 years.  For a couple, that could mean some $160,000 in a saving account, generating tax free interest income. Assuming an interest rate of 5% , this could mean some $8,000 in extra income every year, from interest alone, or some $650 or more per month. That is a significant amount as a second source of income.

And if you account for compounding interest and other money gained from investments made within your TFSA, you could be looking at a lot more cash flow from your TFSA, without having to pay a single penny in taxes on them.

Lesson to take away from all of this? Make use of your TFSA. Even if you can’t max it out, this is the beauty of it: you can always catch up later. Your contribution room never goes away. You can always add to it later. Just remember to be careful and not over-contribute or lose track of how much room you have left.

This article will not go into all the technical details of TFSAs and how they work. For more information on that, you can read this TFSA FAQ page on

Paying for my 2014 Vegas vacation with my 2013 piggy bank savings


Using a piggy bank and with little to no effort, we saved enough money to help pay for a summer vacation in Vegas.

2013 is now behind us. Time to focus on 2014. Financially speaking, one of the basic and first things you should do is have a piggy bank. This is in addition to your regular bank saving account.

You don’t take piggy banks seriously or think they are only for kids? think again!

Personally, piggy banks have been a great source of saving. They have helped me save and pay for some big purchases in the last few years, including major dental bills, vacations, car down payments, pay down debt and more.

My latest piggy bank was born on January 1, 2013 and was retired on new year’s eve (Dec 31, 2013) Me and the wife put our spare change as well as some bills there, on a daily and weekly basis. We made it a habit to always put something, regardless of how small. The point was to be consistent with it. We also made sure that this was our second saving source and not the major one. It is a supplement to our major bank savings.

When it was all said and done, our 2013 piggy bank had enough money to pay almost 70% of the total for our summer 2014 Vegas vacation. How nice and simple is that! We saved for a great vacation (flight and hotel accommodation) with almost no effort. We didn’t have to shed any sweat to save this piggy bank money.

For 2014, we have already started our new piggy bank. It is clearly labeled ‘2014 savings’ and will most likely be used to book another vacation in 2015.  Easy and effortless way to save for a vacation or major purchase.

One of the five principles of good finance and budgeting that we preach about here on is how ‘every bit helps’ and a piggy bank may sound like small effort but with enough time, you can save enough money to go a long way.

Go to your local Dollar Store and pick a piggy bank right away and get started while it is still early in the year.

How roaming the streets of Athens in my teen years taught me valuable entrepreneurial and financial lessons

One of my fascinations since childhood has always been radios. Specifically AM and SW radio.  Having just arrived in Athens,

Collecting calling cards in my teen years helped me buy my SONY SW Radio

Greece in the mid 90s and in my early teens, I was without a radio. I needed one badly. But I was only 14 and with no job, and wasn’t about to ask my family for money to buy something as inessential as a radio. Well at least not important to them. So I took it upon myself to save money and buy one of my favorite radios: a SONY SW Receiver. But at the time, this cost close to $100, a fortune back then. I was still too young and a year away from finding my first job in Athens. So I had to come up with a new way to get the money.

At the time, and prior to the introduction of cellphones in Greece and Europe in general, calling cards were very popular, even for local calls. You would get a calling card with a certain amount of money and that enabled you to use it for a certain amount of time. Very convenient and affordable for most people. Beside their convenience, these cards had a another appeal to them: each had a theme or image of a certain city, place, team, person etc. Needless to say, there was a whole market of collectors, ready to buy and sell these phone cards (after their minutes had been used of course)

At first, I started seeing them in phone booths, left behind once people were finished using them. A few of the people who used them would end up collecting them but the majority would leave them behind. This is where I saw an opportunity I could capitalize on: collect enough of those calling cards and sell them for a profit to be able to buy a radio.

It took me a few months and at the end of it, I found more calling cards than I had imagined I would. It felt like a treasure hunt. When I went to the collector’s corner in downtown Athens, I had more than a few collectors gathering around me, trying to give me the best value for my cards, seeing that I had a lot and of different varieties. I managed to get the best deal which was more than enough to buy my radio and even had some money left to save for other things.

This is one of the best life experiences I have ever had. It taught me to rely on myself and work hard for what I want. It taught me that there is a way to do things if I try hard enough. After all, I managed to save money without having a job or getting money from anyone. All I needed was the right idea, some walking and free time, all of which I had back then.

ING makes saving money cool and interesting

I have been using ING bank to save money since 2008 and it is one of the biggest reasons to which I attribute my increasing interest (pun intended) in saving money.

There are a lot of places you can go to open a saving account but ING is different. Different for three reasons: higher interest rates, ease of use and last but not least, their success in making saving money a cool thing. And this last point is what I would like to focus on here.

We all know that saving money is and never was a fun or cool thing to do. It is all about shopping and spending money to buy anything and everything we desire and want. With ING saving has suddenly become cool, while spending money, not so much. This re-engineering and re-branding of the way we think about money has helped ING become synonymous with saving money and investing for the future.

As part of their effort to make saving cool and fun, they have taken full advantage of the explosive popularity of social media. This has helped it get to even more people, especially young people, and turn them into savers as well.  Their website is also ease to use and have taken the complexity out of transferring money from your regular bank. The site has lots of tools to help you with your saving. For example, you can set an automated schedule to transfer money from your bank to your ING saving account.

If you are having trouble saving money and have been a chronic shopaholic, give ING a try. It may mean the difference between renting for life or having your own house in a few years.

p.s: Full disclosure: the author of this blog, as has already been mentioned, is an ING user. If you would like to open a new account, we would appreciate you mentioning us as a referrer and we will both get a bonus referral fee of $25!  Just mention our referral code “17109393S1”