All You Need to Know About Smart Saving

smart saving


Money management is a primary household focus. Whether you’d be managing your budget with your spouse or by yourself, saving money is a priority. We have already touched on the savings topic and dove deeper into saving as a couple. In this article, we are going to tackle the smart savings topic in depth.

Are you set? Let’s get started then!

Why you should start saving money now

There are three major reasons for saving:

  1. to stock
  2. to build a project
  3. to pass on a legacy.

Although your income is enough to cover your daily expenses, it might be short if you need to cover a more important one. Therefore, stocking money is a smart idea considering tough times happen in life. For instance, imagine losing your job and not finding one for an entire month. Stocked money would be useful to continue living and not be expelled from your home. 

Building a consequent project is another reason to save money. Regardless of the project, be it buying a house, starting a business or traveling for a year, you could use some extra money to follow through with it. 

The last reason is all-too-often forgotten by young people, but is an essential part of adult life: retirement and legacy. We do get caught up in life but let’s not forget the reason we are working today is to enjoy a peaceful life tomorrow. This legacy we are building will eventually be passed on to our children which we will raise to pursue our ventures.

Five ways to start smart saving

Putting money aside each month is a basic way to save. However, you can dive in a little deeper in the saving process by practicing smart saving. Here are five methods to start smart saving.

1. Balance your cheque book


Balancing your cheque book consists in taking a note of all your expenses during a given period of time (i.e. a month). Too often, we tend to waste money on small expenses which add up to create big ones! Balancing your cheque book will make you conscious of your actual spendings.


The first step to balancing your cheque book is to have preset categories. You can start with the basics (food, furniture, leisure, transportation…) and add some up along the way. Give yourself a limited period of time (i.e a week or a month). During this given time period, list out all of your expenses (yes, even the smallest) and split them into the preset categories (you can add some along the way if you figure you missed out one or two).


2. Organize your budget


Organizing your budget can be a little tricky. Indeed, it can be complicated to allocate specific amounts of money for each category. However, by organizing your budget, you will find yourself to be more in control of your expenses. That way you will stop spending extra money on unnecessary stuff (say bye to the afternoon donut you end up regretting each time!).


Once you have balanced your cheque book as recommended in point 1, you can start reviewing how much money you have spent on each category. If your limited period of time lasted a month, make a weekly average of your spendings for each category and try to stick to this budget for the following month. Obviously, the first time or two it will not be perfect! But through time, you will adjust yourself and end up getting the right amounts!


3. Set goals


We haven’t talked about improvements yet, so here we are! If you have followed through points 1 and 2 thoroughly, you should now have an organized budget. However, this budget might not satisfy you. Indeed, maybe in your opinion you are allocating too much money for food and not enough for leisure time! This is when the setting goals method comes into play. 

Here, we are going to observe each category and set spending goals for each one. How can you adjust? This is a step by step process and there are no right or wrong answers. For instance, if you want to spend less money on food, you will maybe have to seek out new cheaper shopping places. Remember to take it easy and start changing your habits step by step in order to keep going on the long term.


Let’s get back to your organized budget. Circle the categories you want to spend more on, and the ones you want to spend less on. On the side, list out how you are going to do it and set precise goals (i.e. Food expenses are currently at $100 / week, I will shop local and expect to decrease my spendings on food by 10%.). Then, during the following month keep track of your expenses given the changes you made and see how much your expenses differ from your targets. Through time you’ll be able to adapt and properly reduce your spendings. This first move will enable you to substantially reduce frivolous spending. 


4. Separate your accounts


Separating your spendings account and your savings account annihilates any spending temptation on the saving side. It also forces you to consider saving as part of your expenses rather than an option. When you consider saving to be an option, you hardly end up saving anything at all! Thus, consider your monthly savings as a salary you are paying to your future self.


To make your account separation efficient, you first have to decide how much you are willing to allocate to savings. Indeed, if you have followed through with the previous methods, you should have sufficiently reduced your spendings to save some money. Open up a new bank account and set an automated monthly payment from your spendings account to your savings account. That way you are sure to be saving money each month. Psychologically, you will associate your savings account as a necessary monthly spending and stop delaying or, worse, withdraw or use your money.


5. Reason in percentages


Thinking in percentages enables you to distance yourself emotionally from the numbers. Mentally, saying to yourself you are saving $500 each month can feel ‘a lot’… but if these same $500 represent 10% of your income, saying you are saving 10% of your income, on the contrary, feels reasonable. Do not let numbers trick you! You can then slowly increase this percentage in order to target better returns.


When organizing your budget, write down what portion each category represents of your total budget. You will stop saying ‘I spend $800 on transportation each month and I think it’s a lot’ and start saying ‘transportation represents 30% of my total budget, how can I reduce that?’. Therefore, instead of figuring out a way to spend less than $800 on transportation each month, you can try figuring out how can these $800 represent less than 30% of your total budget (by increasing your total budget for instance). It can be a useful way of tackling goal setting for categories where you cannot reduce your monthly spendings.



This article gives out a few tips on how to start smart saving. Often smart saving is not what you think. There are several ways to tackle spending issues. One of them can essentially be to increase your overall budget.