From Piggybank to Paris – An Easier Way to Build Your Savings Without Breaking Your Budget
When I was very young, a well-intentioned uncle opened up a bank account in my name and deposited $5 for my birthday. So instead of a cotton candy-coloured My Little Pony that would have earned me serious schoolyard fame, I got a somber-looking bankbook tucked in a shiny plastic sleeve.
Despite my initial lack of enthusiasm, it kicked off a great habit of squirreling away part of my weekly allowance on a regular basis, which to my childish astonishment grew rather quickly… until I discovered Boys and Makeup and Going To The Mall.
I continued to save sporadically over the years and cut back on my expenses where I could, but a proper plan was lacking. My "rainy day fund" became a large jar that I would drop the day’s loose change into, leftover foreign currency, and random $5 bills found in coat pockets from last winter. Anything beyond that felt like a sacrifice to my budget.
The truth is, setting aside savings doesn’t have to be a sacrifice. In the same way I was socking away my nickels and dimes, I eventually realized that setting up a small automatic deposit into a dedicated higher interest savings account would not affect my budgeting at all, but would be immensely practical for emergency savings, major planned expenses, or funds for Christmas gifts. In my case, it was enough for a deposit on the first vehicle the mister and I bought together.
If your budget is a little too strapped to set aside substantial sums, consider beginning with a modest, easy-to-stick-with program using an RBC High Interest eSavings® account. For example:
1) Start with $100 and add $30 every month (that’s $1 a day) to save over $800 in 2 years thanks to the loose change in your pocket. That’s enough for a quick getaway to Paris, France!
2) Start with $50 and add $25 every week for a neat little nest egg of over $1,300 in 1 year, just by brown-bagging your lunch a few times a week. A new walk-in closet with extra space for shoes? Check!
This year, I’m saving for a family ski vacation. What are you saving for?
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I'm a huge believer in saving. I'm always astonished when I learn otherwise responsible people don't have a savings account yet. It's so easy to sock a certain amount away every month and leave it there. Even if you make peanuts, saving just a few bucks a month makes a big difference for your peace of mind. You learn to live without that extra cash. Saving 10% a month is a good rule of thumb, but if that's too much, try 5% or a specific dollar amount, then increase it when your income goes up or your expenses decrease. The money I saved many years ago when I was in a job I hated made it possible for me to quit and live off my savings while going back to school. It literally changed my life.
This is something I have been thinking a lot about lately. I really like your suggestions Claire! They are simple, don't really change your way of life, but will make a difference in the long haul.
@Nik05 - yes, that is a fantastic idea! When you time it to your pay period, you don't even "feel" the withdrawal. It's like that money was never there, so you don't miss it. Great tip, thanks for mentioning!
I have the eSavings account with RBC and I LOVE it! I find the easiest way for me to save is by having up an automatic transfer set up on my pay days. Whenever I get paid, $50 goes right away to my savings account without me having to do anything. When I look at my chequing balance on payday that $50 is already gone and not there for me to spend.
@Becky - With the eSavings account you can make as many deposits or transfers in to the account as you want, there's no fees for depositing. You get one free atm withdrawal from the account per month and unlimited transfers out of the account to another RBC account in your name (as long as done online, at an atm or through their automated phone system). You pay the $5 fee if you withdraw more than once a month at an atm, use it at all in a store for a purchase, pay a bill, do an assisted transfer (having someone in the branch or on the phone transfer for you) or by transferring the funds to another financial institution online.
I need to save.. period? Lol my weakness is the fact a Winners is right next to my house. Curse my weakness for unnecessary shopping.
@AlexJC - I used to be with a bank that rounded up every purchase I made to the nearest dollar and put those leftover cents into savings. When you're talking about small amounts, you'd be amazed how easy it is to set aside some cash! I always used to think that it only made sense to put away $100s to really make a difference, but while writing this post it quickly became clear how easy it is to save small quantities and still make a nice chunk of change out of it.
@Becky - You'll want to double check with the bank, but I can't see RBC charging you to deposit. Maybe your other bank for the withdrawal, so you'd want to find that out. I think what they mean is that you can take out your eSavings cash once per month without any penalty, though ideally you wouldn't need to :)
Worst saver ever = ME
So if I have 2 RBC accounts then I can transfer money from my "chequeing" account to my "Savings" account. What if my chequing account is with another bank? In that case can I only transfer money to my RBC account for Free -once- ? "One RBC ATM cash withdrawal access fee refunded per month" ?
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