Anyone who knows me, knows how much I love to shop. It’s almost an addiction. There’s this high that you get from purchasing something new – I’m sure that some of you are familiar with that feeling. But P and I recently made the decision to save up for a much larger purchase – our first home. Saving up for a pair of designer shoes is one thing, but saving up for a home is something completely different. I’ve been able to train myself to go purchase-free for a couple of weeks to months just to be able to put together enough for a big purchase. But saving up for a down payment is a whole other ordeal. With larger totals to accrue, it’s hard to resist the urge to splurge for extended periods of time. The struggle to spend less and save more is real. And the only way to fix it is to save more, faster.
I’ve spent the last few months researching different methods of increasing my savings, in an effort of decreasing the amount of time that it takes for us to hit our goal. From putting more in our savings accounts, investing in stocks, contributing my max limit to both the TFSA and RRSP, to learning about cryptocurrency, I was antsy to help myself save more in less time so that we wouldn’t have to wait as long to purchase our first home. And yes, while some of them helped, most of them were ideal for longer term savings plans as opposed to short term ones. And with the upcoming holidays, I know that I’ll be spending a lot more than usual on gifts and celebratory gestures.
I’m big on gift giving and get a thrill out of seeing the expression on someone’s face when they like the gift that they’ve received. It’s almost as satisfying as taking off a pair of skinny jeans at the end of the day after you get home from work. There’s nothing quite like seeing the smile on somebody’s face after they’ve opened up their gift. So to that point, I stress a lot when it comes to buying presents. I always want to make sure that it’s the perfect thing, to which sometimes I go over the top and over spend to ensure that I’m getting something nice. I know, I know, it’s not the value of the gift that counts, but the gesture. But again, I have a shopping problem, and most of my friends like the things that I like. And the things that I like happen to be pricey, so please forgive me there.
So when I learned about Meridian Credit Union, and their 1.4% rate High Interest Savings Account (HISA), I knew that it was the right time to reign in on the spending, and to save more. I know 1.4% doesn’t seem like much, but compared to other banking institutions that I currently have my finances in, trust me it’s a heck of a lot in the long run. Which will definitely get me closer towards my goal of saving up for a house faster. How exactly will I be saving up for a house faster? Great question! Let’s tackle some specifics.
First things first, I definitely need to determine my minimum expenses each month (hydro, internet, phone bill, rent, cost of public transit, groceries, etc). This will really help to determine how much I need to spend as opposed to how much I typically spend. Setting down some guidelines for the absolute minimum that I have to spend to keep myself alive and functioning is quite important. From some very rough calculations, this comes out to around $1,275/month.
After calculating my bare minimum spend per month, next is attempting to determine how much I want to allow myself to spend leisurely. Be it for going out and enjoying a dinner with P, brunching with friends, to purchasing birthday/holiday gifts for my friends. Ensuring that I’m not overspending on those will help me to reign back the spending in general and grow my ‘home savings‘ faster. Diving into my regular habits, I realize that I spend anywhere upwards of $400-500 a month on leisure. If I’m going to make strides in my savings, I’m going to need to cut back. Instead of spending that much every month, I’ll set aside roughly $300 to spend on leisure activities instead. The difference ($200) and the remaining of my monthly paycheque.
But keeping in mind that the holidays are coming up, I’m going to have to allocate some of that $300 towards gifts for my girl gang (Mel, Aney, Qing, Nina, and Tee – I know, there’s a lot of them so this is going to be hard). The entire $300 can’t go towards the gifts or else I’m left with nothing left to spend on myself. So setting aside $100 from that $300 is what I’m going to set as goal to spend for all of the gifts together. Trust me, it’s totally do-able! Especially with Black Friday coming up, time to score all of the deals!
Below are some of the gifts I’m thinking of getting for my girls (shhhh! Please don’t reveal the surprise to them!) in order to stay within the budget of $100. Since there are 5 girls in total, I have roughly $20 to spend per person – which is totally do-able with all of the amazing sales that are going on right now!
From there I can determine how much I have to set aside into my savings. If you’re the type of person who can remember to put away your money every time that you get paid – great! Unfortunately I’m not, so setting up direct transfers that will automatically deposit money into my savings accounts is really what’s going to save my butt from easily accessing my finances to pay for unnecessary things. Such as that super cute new dress that I just so happened to pass by and fall in love with at Nordstrom. Which now won’t happen, because house > dress.
The best place to put my remaining available expenses is into a HISA so that it can accrue 1.4% interest over time. Way faster than my current rate with TD. The best way to prevent myself from spending money is to put it somewhere that’s going to allow it to grow. Kind of like being my own parent and hiding away the money for me to spend at a later date. Adulting isn’t that hard when you have all of the tools at your disposal!
If you’re curious to learn more about Meridian’s exclusive 1.4% HISA, you can check it out here. As the saying goes, there’s not better time to start than the present!