| By :
Molly Wider
There are so many good ideas about saving money out there, it is a bit difficult to understand why so many Canadians are still facing bankruptcy (about 100,000 this year will declare themselves bankrupt), and why, as a nation, we're still so badly in debt (to the tune of about $96,000 per household). Still, it's not all bad news. A recent study found that Canadians are now setting aside about 5% of their incomes towards personal savings, up from 2% only a few years ago. But what's up with our record personal debt levels? First, we might be fooling ourselves. If we are not buying $5 lattes any more, but are just spending that $1000+ yearly savings somewhere else on some thing else, we are not really saving anything. (Right?) If you have started buying your ketchup by the barrel at Costco, but now seem to have every electronic gadget in the book, you might be better off switching back to the grocery store and buying smaller quantities, even if it costs more. Bulk buying only works when you buy the products you need, and you keep your eyes (and hands) off the ones you want. The point is, if you're still spending the savings, then you're not saving anything at all. The key to getting out of debt, and increasing your wealth, is to pay off those debts, and then use that money to invest in yourself-by depositing it into a savings account, RRSP, TFSA, or other investment. Bottom line is, it means you have to change your spending habits into savings habits. And never go back. That can seem tough when it appears that no one around seems to be doing anything differently. But if you are using a credit line or credit card to meet your monthly utilities bill, or opening cards in the name of your children to help make ends meet, it is definitely time to stop spending, pay off those debts, and set aside a few gold nuggets for when you really need them. That can be hard to do when we are encouraged to spend, not save. So the little tips and tricks that keep you on the savings track-using cash, getting rid of the credit cards or at least reducing them to one-are essential to establishing new no-spending habits. Canadians are now about $1.4 trillion (yup, that's with a "T") in debt. That kind of cash should have all of us thinking twice about our spending.
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