The Ways We Save 2

10 Tips for First-Time Home Buyers (t... This & That: Young'uns Edition

The Ways We Save 2

The motivation to save and the ideas that will work for you can come from anywhere. Here's Charlene's story about how handy the local library can be:

My best money saving idea is making full use of my local library. The idea came about when I was planning my wedding 4 1/2 years ago. To save on wedding costs, I had recruited my crafty sister to help me make our wedding invitations. She suggested we go to a local bookstore to look for books that would give us ideas. We did go to the bookstore, but motivated to minimize our wedding costs and pay for the entire event in cash, once we located the books that we thought would provide inspiration, I searched for the titles at my local library rather than purchase the books. At an average of $25/book it saved me about $100 dollars. I then applied this to everything else wedding related – wedding planning books, bridal magazines, a book for our wedding emcee. I saved 100's of dollars by borrowing the materials from my library and we were able to apply those savings to other wedding costs.

As my life has evolved, I've continued to use our library for materials on a variety of topics – financial planning, pregnancy, parenting, not to mention for personal entertainment including fiction books, magazines, CD's and movies. We save 100's of dollars/year by borrowing materials rather than purchasing books and magazines or renting movies. These savings allow our family to enjoy a variety of items at no cost and we can put those savings to family outings and vacations. Not to mention, we feel good about being a bit more environmentally friendly by "sharing" the library materials.

Sometimes saving means you have to give up something. That's not always a bad thing. It's amazing how many things we do that not only hurt our wallets, but our bodies too. Here's Laurie:

Although not original or unknown, my biggest and best savings strategy was quitting smoking almost 5 years. I did this for both health and financial reasons. Newly out of an expensive divorce, I was doing everything I could to trim costs so my budget would balance. I already had the basics: bring my lunch to work, cut back on the cable, cancel the newspaper delivery, etc. But there was still a gap. My near pack a day habit was costing me about $300 a month. A significant number. I had two choices, I could start rolling my own cigarettes and save about half the cost. Not bad. Or I could prioritize myself and my health, quit smoking, and save the whole thing.

After a few false starts, I officially quit smoking late August 2006. At first, that $300 went into my cash flow and disappeared just as fast as if it wasn't there. Then I realized, I need to do something worthwhile with this money or I'm just going waste it on something else. My car was old and needing more and more repairs, and a car payment was not in my (while smoking) budget. So I took the $300 a month and went car shopping for a decent car in that payment range.

After a bit of shopping around, and with the timing just right for another major repair on my current car looming, I bought a new-to-me car with my "savings" in January 2007. This is the nicest car I have ever owned. $246 a month in car payment (over 5 years) and my car insurance was an extra approximate $100 year. Plus, my cost of gas expenses went down by about $10 to $20 a month because the new car was more fuel efficient. All "new car" costs within my $300 a month quit-smoking budget.

It's been over four years since I bought the car, it is now paid off and I am still smoke-free.

I now take the money that I was spending on my car payment and purchasing my company stock options, which they will match my contributions at 40% (free money – woohoo!), to save for my next car. I know in a couple years this car will need to be replaced. This time my goal is not just to get another car, but to pay cash for the next car. And I am on track for this goal. I am taking the money that was literally "going up in smoke" and done something useful with it. This money has not been integrated into my day to day cash flow, but instead, put towards an ongoing cost (transportation) so that my budget – and me – remains healthy.

Sometimes saving means using your circumstances to your advantage. Get a pay raise? Save some. Have a way to cut an expense? Save the money you would have spent. If you have a strong enough motivation, like home ownership, it's amazing what you can accomplish. Here's Melissa:

In 2008, I moved from Moncton, New Brunswick to Calgary Alberta. I went from making $45,000 a year to $82,000 (and paying a LOT less taxes). In my old job I was making a very modest RRSP contribution every month (which I intended to use to purchase my first home) and had very little to show for my hard earned money. In Calgary I had more money then I knew what to do with! I knew that I likely wouldn't stay in Calgary–and likely wouldn't keep making that kind of salary–so I decided to speed up my down payment fund and "make hay while the sun shines". Besides making significant monthly payments on my student loan, I contributed $500 per month to my RRSP. When my contract was up in Calgary, I moved to Ottawa and looked for work. After a few months in Ottawa I landed a great job and a 6 month house-sitting gig. In exchange for taking care of the house and the cat, I was only responsible for paying the utilities. Knowing I was saving about $750 per month on rent, I saved the difference in my down payment fund.

These steps allowed me to save $7500 in just over a year, which I used as part of a downpayment on my first home.