My Money, My Choices
Gail Vaz-Oxlade is a personal finance writer, television host and radio broadcaster. Every Wednesday, she arms Metro readers with tips to keep spending in check.
Gail Vaz-Oxlade: 7 sure-fire ways to sink your savings
There are many ways to ensure you don't save enough money to achieve your goals. Here are seven.
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There are many ways to ensure you don’t save enough money to achieve your financial goals. Here are seven guaranteed to make you NOT succeed:
1. Don’t put money into a retirement savings. Hey, you’ve got better things to do with $20 a week, right? There are coffees to be bought, vacations to be enjoyed, and nights out on the town to be had. Besides, the government has a great plan in place to take care of you when you’re old and grey. Failing that, you can always move in with the kids.
2. Pass on the Canada Education Savings Grant. If you put money into an RESP the government GIVES you money. A $2,500 contribution means the Feds will add $500, which is an immediate 20 per cent return. Hey, your kidlet can get student loans to get through school just like you did. So what if costs have skyrocketed? What was good enough for you is good enough for your kid.
3. Be content earning a pittance on your savings account. Yeah, you know that there are legitimate banks out there willing to pay you four or five times what you’re currently earning. But, hey, interest rates are so low it barely makes a difference. And moving your account is such a pain. Besides, you’ve been dealing with The Big Bank all your life. The fabulous service they give you is more than worth the pathetic interest you earn and the huge fees you pay. Aren’t all banks the same anyway?
4. Stick with your monthly mortgage payment. Who cares that saving money on mortgage interest is as easy as choosing to make accelerated payments on your mortgage. That can’t be right and anyway . . . it’s just another of those fancy marketing tricks. After all, how can paying accelerated weekly instead of monthly mean the equivalent of one extra monthly payment? Sure, they say that could save four year’s worth of interest! But that can’t actually be true, can it?
5. Stick with a low deductible on car insurance. If you have an accident, you don’t want to have to shell out more than $100 or $250 to get the car fixed. You just don’t have that kind of money lying around. So it costs a little more for a lower deductible, so what? You know that when you do end up having an accident, you’ll be covered. And the fact that you paid $350 a year more for your insurance will be worth it. After all, you have an accident every five years or so anyway, right? . . . Wait a minute, is that really $1,750 in extra insurance premiums?
6. Carry a balance on your credit card. Everyone carries a balance, what’s the big deal? You’re making your minimum payment. That’s good enough for your credit score. Who cares if it takes 10 years to pay for the barbecue you just put on your card? So, the barbecue will cost more, but you got a great deal on it so it’ll all come out in the wash.
7. Don’t sign up for your employer’s savings matching program at work. Sure they’re willing to match your retirement savings contributions up to 3 per cent a year. And, sure, that’s like getting a raise. But you shouldn’t have to cut back on your spending to get that extra money. Hey, you slave away at your job and you’re not about to give up the $125 a month specialty channel package to get a pathetic extra $1,200 a year from your employer. TV helps you to relax.