10 things you can do to save money and eliminate debt

1. Set a goal

If you’re serious about saving you need to set a goal so you know what you’re saving for. Whether it’s a trip to Japan you hope to take in a few months or saving for retirement, having a very specific goal will help you stay motivated and on track.

2. Track your dollars

The best way to get on track to saving is to spend less than you earn. Tracking your spending—either through a daily journal or an app—can help you do this.

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3. Trim spending

Consider trimming expenses. Once you know how much you’re spending monthly, you can decide what areas you’d like to cut back on so you can meet your savings goal.

4. Kill two birds with one stone

For those with low to moderate incomes, paying off debt—including the mortgage—is the best tax-planning you can do. That’s because you don’t pay taxes on the capital gains on your home and there’s no tax on the return you get for getting out of debt.

5. Automate it!

Set up an automatic transfer of funds to a savings to a savings account (or TFSA or RRSP) so that a set amount—say 10% of your gross monthly income that comes off your paycheque automatically. This way, it’s not a question of finding the willpower to save every month. So save first for the goals that you have and then spend what’s left over.

6. Pay less tax

Slash your taxes by making sure you use TFSAs and RRSPs properly. Hint: Generally speaking, if you make less than $50,000 annually, TFSAs work best. If you make more than $50,000, then saving in an RRSP works best.

7. Don’t tempt yourself

Eliminate temptation to control spending. Forget roaming through malls and bookstores where impulse buys are common. Instead, hit the gym or join a book club to stay busy and engaged.