Remembering those who gave (and saved)

We owe a lot to generations past, to those who sacrificed so others could have a brighter future.

For people who’ve weathered harder times, saving was another way to ensure a brighter future—for oneself and one’s family.

“A penny saved is a penny earned” may not be uttered as often these days, but sacrificing something now to ensure a better future is timeless wisdom.

Today, nearly half of employed Canadians live pay cheque to pay cheque, according to a 2017 study by the Canadian Payroll Association. And 41% spend all of or more than their net pay each week.

Different generations. Different values?

Values around money and saving have changed since the Depression era, and so has the way money habits are taught. With so many financial transactions happening digitally, it’s not as easy for children to see how their parents manage money. And, sadly, not as many parents actively teach their children good money habits. Often people don’t even start thinking about money management until they’re in a crisis.

Peace of mind (the traditional way)

Today, opening, and feeding a flexible, personal savings account is a first step to establishing financial security. It will also help you develop the saving habit, so you can begin looking further into the future than just next month.

Jessica, a 30-year-old office administrator (living in Vancouver), is both lucky and smart. She got great money advice from her mother—and she listened.

“My mom made me start saving early,” she said. “My siblings and I had three different accounts when we were little – short-term savings, long-term savings, and mad money. As soon as I got my first job I started saving for retirement.”

Here’s Jessica’s best advice on saving for retirement based on old school values:

Start small. Pick a realistic goal. Consistency is more important than an aggressive goal you can’t sustain. You don’t really miss it when you save 5 or 10% of your income every two weeks.

Don’t rely on willpower. With an automatic transfer, you never even see that money. It just happens. You never have that moment when you think, “Hmm… what could I buy with that now?”

65.2% of households contribute to either Registered Retirement Savings Plans (RRSPs), or Tax-Free Savings Accounts (TFSAs), according to Statistics Canada census data.

Start early. Compound interest is your BFF. It works for you while you’re sleeping. It not only adds, it multiplies the money you give it. The trick is to start early.

“Seeing it grow kept me going,” Jessica said. “I started off at 18 with $25 every two weeks in a GIC.”

If you didn’t start saving at 18, don’t worry. The best time to start saving is right now.

Hold the habit. If your financial situation changes, adjust the amount, but keep the habit. Save $10 a pay period for example, instead of $25.

Forget about it. But not really. Saving works best when you sock it away and forget about it, but periodically you’ll want to review and revise your plan. Big life changes: going to school, getting married or divorced, having a baby, or a new job, can all affect the amount you’re able to save.

Double up. If you work for a company with RRSP matching contributions, your money will grow even faster.

“That felt like free money,” Jessica said. “When I left a company, I would take it from there and put it in my own RRSP account.”

Retirement may seem light years away, but saving now will ensure a brighter future for you and your family.

It’s never too early to start conversations with children about saving. When’s the best time to start saving for retirement? If you ask generations past—it’s today.

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