Slow and steady saving makes money mountains out of molehills

By KIM COVERT, Postmedia News

A penny saved is a penny earned, the old saw goes, and there are indications Canadians have absorbed the message — according to one Scotiabank survey, 96 per cent of us feel better when we have a little something tucked away.Photograph by: Sebastian Derungs, AFP/Getty Images
OTTAWA — A penny saved is a penny earned, the old saw goes, and there are indications Canadians have absorbed the message — according to one Scotiabank survey, 96 per cent of us feel better when we have a little something tucked away.
That said, most Canadians could use some lessons in putting their money where their mouths . . . er, savings accounts . . . are.
A survey this fall by ING Direct found that one in two Canadians find it hard to put away even $25 a week.
Uncertain economic conditions play into this, of course — if you’re living paycheque to paycheque, struggling to eat and stay warm while the prices of food and fuel rise, $25 a week can seem like a lofty goal.
But the ING survey found that among Canadians who could afford to sock away $25 a week with a little bit of effort, it’s that little bit of effort that keeps them from doing so.
“Mounting pressures have made saving difficult, yet a lot of average Canadians appear unwilling to commit to the small daily changes that help save a little money each week, and lead to great financial well-being,” said Peter Aceto, chief executive of ING Direct.
Saving a little bit each day adds up to more than you’d think —for example, 30 cents is about the change that you get buying a large double-double at Tim Hortons with a toonie. Thirty cents a day for 30 days is nine dollars — nothing much, but multiply that by 365 days a year and you’ve got the price of a warm pair of winter boots. At the end of a year of saving $25 a week, your bank account would be $1,300 richer — that could get you a week at a nice all-inclusive resort and it’s more than twice the amount that the average U.S. consumer expected to spend on Christmas gifts this year.
“Instead of focusing on how to make big dents into debt repayment or radically changing a standard of living, think about cutting back some of the smaller daily spending, which is often unaccounted for and adds up significantly over the course of several months,” said Aceto.
Respondents to the survey identified eating out less, shopping less, making lunch and coffee at home and using coupons as ways to make those little changes.
While the ING survey found 24 per cent of Canadians are currently saving less than $1,000 a year, and 31 per cent say they’re nowhere near reaching their financial goals, a Scotiabank survey conducted at roughly the same time suggested they are doing better than a year ago — 42 per cent reported having saved enough money to cover two or three months of household expenses, up from the 33 per cent with that kind of rainy day money a year earlier.