Moneyzone – Five ways to save money.

Five ways to save money.

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1. Stop Paying Fees – Many banks will waive service charges if you maintain a minimum balance, usually $1,000. While it may be difficult to keep that much money in the bank but it’ll pay off in savings in the long run (if service charges without a minimum balance are $20 a month, you’d save $240 a year). Also, many banks charge for the use of passbooks so opt for online or mailed statements instead.
2. Go the Extra Mile – Only use your own bank’s ATM machines. Walk the extra ten minutes to your own branch. The fee to use another bank’s ATM is considerable and if you’re already
paying service fees, it’s twice as bad. Also, anticipate your spending needs making withdrawals. Paying $3 or more to withdraw $20 (a surcharge of at least 15%!) is just poor planning.
3. Upgrade Your Account – Open a savings account with ING Direct, President’s Choice Financial, or a similar bank. These institutions offer significantly higher interest rates than regular banks but still allow the user to withdraw money at any time without penalty. Shop around for an institution that suits you.
4. Use the Proper Credit Card – If you’re constantly accruing interest on unpaid balances,switch to a card with a lower interest rate. Many people are not using the correct card for their needs.
5. Simplify Your Life – Avoid late fees and stop paying for stamps and cheques. Do your banking online or over the telephone. You can pay bills and transfer money without leaving the comfort of your own home and fewer trips to the bank will also save
you money on gas.
So you’ve got some money saved, but aren’t sure what to do with it? Here are five investment options to consider.
1. RRSP (Registered Retirement Savings Plan) – It’s never too early to start contributing to an RRSP. The contributions are tax deductible and the income earned is tax sheltered. Therefore, you will not pay taxes on this money until it is withdrawn. There are other benefits as well. Explore your options.
2. GIC (Guaranteed Investment Certificate) – This is a risk-free way to earn interest on your money. There are different kinds of GICs but most function in the same way. When purchasing a GIC (available in various amounts and term lengths), you are in essence lending money for a set period to an issuer who will pay you interest for the privilege.
3. Canada Savings Bonds – Another easy, risk-free way to earn some interest on your money.Similar to GIC’s, bonds can be purchased in small denominations ($100) and are easily converted to cash. Best for longer-term investing.
4. Mutual Funds – Though it varies with the type of fund you invest in, the risk is often quite low and you usually don’t have to invest a huge amount. With mutual funds, a corporation takes money from public investors and employs a professional to place that money into various investments. Shop around for a reputable mutual fund company.
5. Stocks – One of the riskiest but also most lucrative ways to invest your money is in the stock market. You, the investor, become an owner of shares or stocks in a particular company (in effect a partial owner of the company). If the company does well, you win. If it does poorly, you lose. Not for those averse to risk.

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