For our second Lunch & Learn series, we had Mike Erickson from Connect Wealth join to give us some tips on how to save money.
Something we all have in common is the impact of money, and the need to manage our personal finances and save money.
Mike is a financial advisor and works at Connect Wealth in Surrey, BC. He was gracious enough to spend his lunch hour sharing his knowledge with us and even answering our questions.
Mike covered some really interesting topics, including…
- Why Prepare for Retirement?
- Benefits of Starting Early
- Investment Options Available
- Practical Saving Strategies
One of the most impactful slides he shared compared the impact of starting to save $10,000 per year at the age of 25 compared to 35:
The difference of starting your savings journey of $10,000 per year at the age of 25 vs. 35 can make a huge difference on your retirement, and how much you’ll have to live off of—nearly two-fold!
You can save nearly DOUBLE the amount of money by retirement age if you start in your mid-20s instead of your mid-30s.
That’s all great in theory, but diligently saving $10,000 per year in your 20’s can be a challenge.
With that goal in mind, Mike shared a bunch of tips on savings and investments to help guide us in our financial journeys—and none of the tips involved looking under your couch cushions or skipping the avocado toast (thank goodness).
10 PRACTICAL MONEY SAVING TIPS AND STRATEGIES
- Create a Financial Calendar
If you don’t trust yourself to remember to pay your quarterly taxes or periodically pull a credit report, think about setting appointment reminders for these important money to-dos in the same way that you would an annual doctor’s visit or car tune-up. - Check Your Interest Rate
Q: Which loan should you pay off first? A: The one with the highest interest rate. Q: Why does credit card debt give us such a headache? Paying attention to interest rates will help inform which debt or savings commitments you should focus on. - Track Your Net Worth
Your net worth—the difference between your assets and debt—is the big-picture number that can tell you where you stand financially. Keep an eye on it, and it can help keep you apprised of the progress you’re making toward your financial goals—or warn you if you’re backsliding. - Set a Budget, Period
This is the starting point for every other goal in your life. Include ‘Savings’ as a line item! - Allocate At Least 20% of Your Income Toward Financial Priorities
This includes a mortgage, as a mortgage considered to be “good debt”. - Set Specific Financial Goals
Use numbers and dates, not just words, to describe what you want to accomplish with your money. How much debt do you want to pay off and when? How much do you want saved, and by what date? - Opt for Mortgage Payments Below 28% of Your Monthly Income
That’s a general rule of thumb when you’re trying to figure out how much house you can afford. - Do everything possible to NOT cash out your early retirement account early!
Get a line of credit as a rainy day option instead of dipping into your retirement savings. - Direct Deposit is (Almost) Magic
Why, you ask? Because it makes you feel like the money you shuttle to your savings every month appears out of thin air…If the money you allot toward savings never lands in your checking account, you probably won’t miss it—and may even be pleasantly surprised by how much your account grows over time.. - There Are 5 Types of Financial Emergencies
Only dip into your emergency savings account if you’ve lost your job, you have a medical emergency, your car breaks down, you have emergency home expenses (like a leaky roof), or you need to travel to a funeral.
SITES & APPS MENTIONED IN THE PRESENTATION
WRAPPING UP
Use these 10 practical saving tips & strategies to help nest away that $10,000 per year now so you don’t have to worry about spending too much on retirement lattés later.
Still have a few questions, or some money you want to stash away for a few decades? Connect with Mike here.
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