Tag Archives: MSN Money

Knowing where our money goes can help us save

We talk, often at great length, about ways to save money – to squirrel a little away each month for our life after work.

And while we all seem to wish we could save more, an answer to the question “why aren’t we saving” can be found by looking at where we are spending our cash. Where, Save with SPP wants to know, are our “non-savings” going?

According to Statistics Canada data from 2016, reported on in the Slice.ca blog, Canadians spent an average of $84,489 per household in that year. That’s what they spent, remember, not what they made – most of us spend more than we earn.

The blog reports that Canadians spent the most on shelter – 19 per cent of the total. “In 2016, according to StatsCan, the average Canadian household spent $16,293, or a little over 19 per cent of their total expenditure, on their principal accommodation,” the blog reports.

Next on the list is income tax, weighing in at 18.1 per cent. “They say that the only things that are certain in life are death and taxes. In Canada, $15,310 – or 18.1 per cent – of the average household’s total expenditure went to income tax in 2016,” the blog explains.

The third biggest category is called “private transportation,” our vehicles, which cost us $10,660 per year, Slice.ca notes. The category makes up 12.6 per cent of the total.

Next biggies are food, at seven per cent ($6,176) and “household operations,” which includes phones and Internet — $4,705, or 5.5 per cent, Slice.ca reports. Rounding out the top 10 (Slice.ca actually gives the top 20) are insurance and pension contributions ($5,067, or six per cent), clothing and accessories ($3,371, or four per cent), restaurant dining ($2,608, or three per cent), healthcare ($2,574 or three per cent) and utilities ($2,460 or 2.9 per cent). Savings didn’t make the top 20.

We can’t do much about most of these categories, but some are “non-essential” and could be targeted for spending cuts. If we were to save even 10 per cent of what we spend on vehicles, phones and Internet, clothing and restaurant dining, we’d have a whopping $2,134.40 to add to our retirement savings each year. Saving five per cent would provide a $1,067.20 boost to your savings.

Global News reports that we Canucks “splurge on guilty pleasures.” Citing research from Angus Reid and Capital One, the broadcaster reports that 72 per cent of us “dine out several times a month,” 71 per cent “regularly order takeout,” and half of us buy coffee daily.

MoneySense notes that a lack of personal savings has a variety of negative impacts for Canadians. Citing research from Abacus Data, the publication notes that only 34 per cent of us could “come up with $1,000 right away without borrowing or using credit.”

Debt seems to be missing from these spending stats.

According to the Financial Post via MSM Money  the cost of paying our debts is cutting into our ability to pay other expenses.

“More than half of Canadians say they’re increasingly concerned about their ability to pay debts as disposable income shrank by a fifth since June,” the Post reports, citing data from insolvency practice MNP Ltd.

“Average monthly disposable income after paying bills and debt obligations fell $142 to $557,” the Post reports, adding that “nearly half — 48 per cent — of the 2,002 respondents to the early September poll by market research company Ipsos said they’re left with less than $200 at the end of the month.”

This is a lot of information, but a picture emerges. We’re not, as a rule, planning on saving anything each month. In fact, credit balances are getting so high that many of us can’t cover all our bills without dipping further into debt. We can understand how we might cut back on spending, but we also have to cut back on using credit, too.

We all have the power to cut back on spending and borrowing. That will not only reduce our costs, it will reduce our stress levels. Imagine a future where you have control of all your bills – it’s an achievable dream. And as you get to that desired level of financial freedom, you’ll have more and more money to put away for retirement.

If you’re looking for a place to grow those hard-earned savings, look no further than the Saskatchewan Pension Plan. Be sure to check them out today.

Written by Martin Biefer
Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock. He and his wife live with their Shelties, Duncan and Phoebe, and cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

Aug 18: Best from the blogosphere

By Sheryl Smolkin

185936832 blog

In this week’s Best from the blogosphere we revisit some of our old favourites who have appeared repeatedly in this space.

First of all, congratulations to Robb and Marie Engen who are pioneers in the world of personal finance blogging. This week they are Celebrating Four Years Of Boomer & Echo. Their articles have been featured in the Globe and Mail, MoneySense, the National Post, and MSN Money.  They’ve been interviewed and quoted in numerous online and print magazines, and recognized as one of the best personal finance blogs in Canada.  Robb also writes a bi-weekly column in the Toronto Star.

On retirehappy, Jim Yih crunches the numbers to find out if it makes good financial sense to Rent or own vacation property in Vernon, B.C. He concludes that the amount of $16,000/year it would cost to carry the property probably cannot be recouped by renting the unit for part of the year. He also decides that renting makes more sense because the property may not increase significantly in value over time.

Tim Stobbs keeps us up-to-date on his retirement journey on Canadian Dream: Free at 45. Therefore I was initially surprised when I saw I Hate Hard Work is the title of one of his recent blogs. But it makes more sense when he clarifies that he would rather work smart than work hard. That means even at the office he tends to focus most of his efforts on high impact items, so although he doesn’t work hard Tim says he is more effective than the majority of his co-workers.

“I just refuse to spend lots of time working on something when in fact if I focus on the core items I can get 80% of the work done with a mere 20% of my effort,” he says.

The Big Cajun Man, Allen Whitton reminds us that Lifestyle Creep is like “Feature Creep,” a term used in high tech development teams, where someone keeps trying to shove more and more into a release of software or hardware, thus slowing things down, and eventually making the whole thing unusable. In other words, if every time you get a raise or pay off a debt you use the money to buy a bigger house, a newer car or more consumer goods, your financial picture will never really improve.

And on Brighter Life, Kevin Press asks the perennial question, Why is financial literacy such a stubborn problem? He shares the following thoughts:

First, he thinks it’s a mistake to argue that personal finance is uniquely difficult to teach and learn. It is a complex and technical subject certainly, but so are dozens of others. We could just as easily be sweating about why so few Canadians understand how to take care of their cars.

Second, the complexity of the subject is not the issue. The problem is the way we are trying to teach it. Adult learning theory explains a number of things about how adults prefer to be taught new information.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.