Saving is mostly a matter of arithmetic.
If you can put away a quarter – that’s twenty-five cents – every day, at the end of a year you’ll have $91.25 that you didn’t have at the beginning. It’s not a lot of money, but it beats nothing, and you didn’t pay service fees to get it. Most of us wouldn’t miss a quarter. If you would, try a dime, or a nickel, but drop something into that jar every day.
On the right is my change jar. This is what’s accumulated in three and a half months. In the next post I’ll tell you what’s in it (because I haven’t got around to emptying, rolling and counting it yet). It’s not a lot, guaranteed, but it might be enough for a dinner out, or a book, or some little luxury I would otherwise not have. In December I had enough in my change for the year to allow me some small donations to charities I wanted to support, and gifts to friends. That was a great pleasure, and I didn’t miss the money when I put it away.
The change jar is my favourite daily trick. I also have an insurance policy which, if I don’t use it, gives me back the premiums at the end of fifteen years. As a self-employed person, I thought that disability and crisis insurance were good ideas for me. In addition, I consider this my savings account. Every month I put away about $100 while paying my insurance. In a couple of years now I’ll get a large chunk of money back – and it’s tax-free because I paid my taxes on it before I spent it on insurance.
That’s the thing about this kind of saving – it’s money you’ve already been taxed on, so, unlike RRSPs and other tax-sheltering funds, you won’t have to lose a chunk of money when you take it out. Please believe I’m not discounting the value of RRSPs – if you can afford one, and if that idea works for you, go for it. Me, I’ve never had that money to put away.
I’m not going to hand you a line about it being easy to save. I’ve had many months when that insurance payment was a burden, and many days when I raided the change jar for milk or cat food (for the cat, not for me!) I also know that inflation means a dollar ten years ago was larger than it is today in practical terms, and that ten years from now they’ll be still smaller. Getting interest for your money in an investment portfolio can offset that, but that only works if you don’t need the investment money to live on. The rest of us have to suck it up and do what we can.
Talk to your insurance people about the premium-return option. Get a jar and drop a nickel, or a dime, or a quarter, into it every day. (If a piggy bank makes you feel more cheerful about it, get a piggy bank.)
Next – what’s in my change jar.