Advice On Saving Money For Life

Another Faze interview with student financial advisor Kevin Cochran

What are ways to avoid blowing all my summer income when I go back to school?

The key to not spending all your money and saving money instead is to make it automatic. If you have a part time job, in most cases pay checks are automatically put in your bank account. You can make an arrangement with your bank for them to make an automatic transfer of money and put it in a GIC or an RESP, depending on how old you are. I recommend setting aside 10% of all money. The key is to transfer the money into an account you can’t touch. I personally recommend TD Canada Trust, they have great programs.

How much would you recommend I set aside from my summer cash?

I recommend saving 10% of every dollar you make. If you starting doing that now and continue doing so, I guarantee you will become a millionaire. Most millionaires I know don’t make a million dollars a year, they make anywhere from $40,000-$90,000 but they have two things in common:

1. They all budget themselves

2. THEY ALL STARTED TO SAVE MONEY AT AN EARLY AGE!

If you start saving at an early age look at the return you will receive.

Every year you wait to save money costs you $4000. The reason people never get rich is they want it to happen in 3 weeks. Saving money takes time.

Is there a strategy I can use to curb making unnecessary or impulse purchases so that I don’t go broke? Is it wiser to put away chunks of money or save little by little? And if I do save, what should I do with this money?

The key to avoid impulse buys is to be able to determine the difference between needs/wants. Myself personally, I love all the toys — I have the 60 inch Sony plasma, boats and nice cars, but before I bought all of these purchases I made sure I saved 10% of every dollar I earned. The only time we feel guilty about spending money is when we don’t save anything off our pay check. If you save that 10%, I say spend THE HELL out of the other 90% you won’t feel guilty at all. I believe you need to have fun with the money you make. The difference between rich and poor people is this — rich people save first and spend what’s left — poor people spend first and save what’s left (which is usually nothing).

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