06 Feb Saving at the pump: 8 ways to use that money wisely
Gas prices across Canada are starting to creep back up, butt they’re still well below what they were last summer. That means extra money in your pocket. What to do with it?
Consider your options before going on a shopping spree.
For starters, you could estimate how much you’re saving withevery fill-up, then after hitting the pump, put that money aside.
“You don’t need to go as far as placing the monies in a bank account,” says Anthony Larsen, certified financial planner and money coach with Money Coaches Canada in Vancouver. Having a “Gas Savings Money Jar” can be very motivating to look at.”
Start or build up an emergency fund
“Put your savings at the pump into savings for a rainy day if you don’t have an emergency fund,” says Leony deGraaf Hastings, certified financial planner at Burlington’s deGraaf Financial Strategies. “When an unexpected expense comes your way, you will be glad you had a cushion.”
Chip away at debt
“Pay down debt by making an extra payment on your credit card or saving up enough for an extra mortgage or loan payment,” deGraaf Hastings suggests. “The compounded interest savings makes your extra payment go further.”
Follow through on your New Year’s resolutions (if it’s not too late!)
“It is the beginning of a New Year so use the extra monies toward a resolution, whether it’s new workout equipment or trying out a fitness class, things that will make you feel good about how you spent the extra money and that you have been putting off if the costs were a deterrent,” Larsen says.
Consider what expenditures you have coming up and direct your savings there.
“Spring is very close, which means many kids’ activities will be changing, and there will be costs associated with that. What do you need to get the yard or garden started? What about pet grooming or flea medication?
Start or pump up a vacation fund
“This is a fantastic opportunity to help save for a family summer vacation,” Larsen says. “Or, if you were already planning on heading south, the extra money will come in handy with the low Canadian dollar.”
Contribute to RRSPs or TFSAs
“Not enough people are making regular contributions,” says Kelly Ho, certified financial planner at Vancouver’s DLD Financial Group. “When you contribute on a biweekly or monthly basis, it really adds up over time; this is a great opportunity to do that. Even if you bump it by $25 a month or $25 a pay, it will increase your savings and you’ll be taking advantage of dollar-cost averaging.”
Contribute to your child’s RESP
“Assuming you don’t need the extra money for living expenses, allocate extra funds to kids RESP,” Ho says. “To take advantage of the federal government [Canada Education Savings] grant, you only need to contribute about $208 a month. It’s a great way to get free money from the government.
Put money into your relationship
“Invest your savings into your relationships by taking your significant other out for dinner or a movie or having lunch with a grandparent or an old friend,” deGraaf says. “This investment could pay off the best dividends of all.”