Are you saving enough money?
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6 simple ways to be better with money

Are you saving enough money?

Words— Frank And Oak staff

Along with losing weight or finding a new job, saving more money is one of our more perennial resolutions.  Not such a fun one is it? You can’t just join a gym and there’s no real fun or active way to go about saving. It’s about developing balance between making sure you’re gratified today while looking out for your future. But with a few simple tips, by the end of this year, you’ll have a nice chunk of change you could actually do something substantial with. And that’s fun to think about.


We spoke with Silvi Pukitis, a Financial Coach at KOHO (which offers prepaid Visa cards with no fees and an integrated app) who gave us her top ways to make the most of your hard-earned coin.



Do a “check-up” on where your money has been going



Ignorance is bliss is not a great motto, especially when it comes to looking after your finances. The first step to improving your money-management skills, Pukitis says, is by doing the sometimes painful process of looking under-the-hood at where your money is actually going. “Break-down your expenses into major categories (housing, groceries, eating out, retail spend, Uber, etc.). Next, download your bank statements for the past two to three months and track how much you’re spending in each category. You might not have realized that you were spending $100 a month on lattes! Once you know, it’s much easier to make changes and free up some cash.”




Set specific financial goals




Do you want to pay off debt? Buy a house or car? By when? Pukitis says that it’s helpful to have goals so you know what you’re reaching for. If you don’t have specific goals, putting 20% of your income aside for debt or savings is a great place to start. After paying down high-interest debt, where should this 20% go? Here’s how she breaks it down.


Build-Up A Float or Emergency Fund: “There is no ‘correct-amount’ for this (since we can’t predict the unpredictable), however, enough to cover one to two months of expenses, the cost of a vacation or emergency vet bills is usually wise. Having access to low-cost money (such as a cheap line of credit) is also a good idea, especially if you don’t have a lot of savings to fall back on.”


Intermediate Goals: “A TFSA is a great vehicle for non-retirement savings. Everyone has unique goals with different price tags, but it can never hurt to prioritize maxing out your TFSA, since it’s tax-free money that you can take out anytime.”


Retirement: “It’s impossible to give a general percentage of how much you need for retirement. If you have a great government pension, you may not need to save more than 5-10% of your income. For people that have no pension-support, you’ll be in great shape if you start putting 10-20% of your paycheque towards retirement. If you have an employer-sponsored plan, be sure to max it out as it will help you reach that 10-20% goal. Another way to save more is if you get that 10% raise, save 10% more. You won’t miss the money.”



Pay yourself first



Set up automatic payments from your bank account towards your savings accounts or debt. “People tend to save twice as much when they do this,” says Pukitis. “For example, if you’re determined to save 15% of your paycheque for retirement, have the 15% come out the day after your paycheque gets deposited. You likely won’t notice it’s gone.”



Keep an account that’s strictly for “fun-money”




It’s easy for expenses to get out of hand when there are no guardrails. Pukitis says that by doing the aforementioned “check-up” you’ll know roughly how much you can or want to spend on discretionary expenses each month. These are not fixed bills such as rent, utilities, insurance, etc., but rather the “variable” expenses that are harder to control.


“Once you know this amount, try putting this portion of money into a separate account each month. This is your ‘budget,’ which you can spend all of and not feel guilty. KOHO is a great card for this. It’s a prepaid Visa with no fees, where you earn 0.5% cash-back per transaction and which has an awesome app to track your spend.”


The most important thing is to know if you can afford that extra dinner out.



Evaluate purchases by cost per use (or wear)



Want to splash some cash on a big ticket item? You can! When you’re not sure whether or not you should buy something, try evaluating it on a cost-per-use basis, Pukitis says. “For example, if you compare an expensive pair of shoes to wear to work every day, versus a jacket that you can only wear in very specific circumstances, the cost-per-wear (CPW) would be lower for the shoes.” Go for it!



Limit your credit card purchases and regularly pay it down



Credit cards are great for the perks and rewards, but they are very expensive (20% interest) if you rack up a balance you can’t pay down. For Pukitis, the key is paying it down every month. The KOHO card is also a great alternative to a traditional credit card because you put your own money onto the card, meaning you can never owe interest. Yet, like a credit card, you’re getting cash-back rewards.


Bonus: Start investing



So you’ve paid down all your high-interest debts (such as credit card debt or loads with higher than 5% interest). Congrats! You are now in a position to invest—a great way to make money on your savings.


For Pukitis, any money you’ll need to access relatively soon (one to three years) should still be invested in a safe savings account or GIC (which, yes, still counts as investing). “Money you don’t need for longer than three years (e.g. retirement) can be invested in an investment portfolio. I suggest checking out a low-cost ‘robo-advisor’ or check with your money-savvy friends.”


KOHO is a Canadian financial/ technology company that’s here to help you save for the future you want. They offer a slick reloadable Visa card with an integrated app. Get real-time insights into your money, automate your savings goals, and earn instant cash-back on all your purchases. KOHO is also free, because paying bank fees is so 2018.


Download the KOHO app now and sign up with promo code FRANKANDOAK to get 1% cash back credited to your account when you make your first purchase (Available to the first 1000 customers)

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