As vaccination rates climb and reopening plans are released, Canadians are looking forward to getting back to "normal." Making travel plans, hanging out with friends and date nights in actual restaurants are on many people's to-do lists. But after more than a year of living very differently, are there any changes that'll stick around?
New research by Scotiabank shows that, with fewer opportunities to spend money, Canadians have adopted positive financial habits, with almost half (46%) of Canadians saying they've saved more money during the pandemic compared to previous years.
In the same survey, over a third of respondents said they plan to continue cutting back on spending, and hope to do more research before making purchases.
While post-pandemic life will likely be liberating, mindful spending and saving habits are worth hanging on to as things open up again. If you're worried about your ability to keep saving when life returns to normal, you can follow these tips to maintain positive money habits.
Choose The Right Bank Account For Your Lifestyle
For many young people, shopping around for a bank account might be an unfamiliar concept. You might still have the same account that your parents helped you set up when you were 15, or maybe you just have a single chequing account where all of your funds sit. But when it comes to banking, you've got options.
It's important to review your current bank account and ask yourself whether your current setup suits your needs. Do you know how much you're paying in fees? If it's more than you want to be paying, perhaps look into a low- or no-fee account for everyday banking.
There's more to choosing an account than comparing fees. Does your account offer unlimited debit transactions, no-fee international money transfers or a waiver of annual credit-card fees? If your current account doesn't have inclusions like these, consider switching to a bank account that does. The Ultimate Package from Scotiabank, for example, offers all of these benefits, plus additional perks.
Track Your Spending
A budget is one of the best tools for saving, and it's also one of the most intimidating. But just like everyone's financial situation is different, your best budgeting tactics will be unique to you as well.
There are various methods to track your spending, from apps and spreadsheet templates to good old pen and paper. Figuring out the most useful method might take some trial and error, but it's worth it.
Calculating spending allowances can take some time too, and they'll adjust over time as your finances and priorities change. There's a basic formula you can follow, and it goes a little something like this:
- Calculate your income
- List out your fixed monthly expenses (rent, bills, etc.)
- Estimate your variable expenses (groceries, gasoline, etc.)
- Determine your budget, with your expenses in mind
A typical budgeting philosophy is the "50-30-20 rule," where 50% of your budget is represented by essential expenses, 30% is for "wants" (like eating out and non-essential purchases) and the remaining 20% accounts for savings and/or debt payments. This division of funds allows you to cover all of your expenses, while also prioritizing financial goals. You can adjust these percentages however you want to suit your income and goals
Put Your Savings To Work
According to Scotiabank's research, as Canadians keep their unnecessary spending down during the pandemic, they're becoming better savers too. Most Canadians (79%) are being cautious with their spending and more than half (58%) have been able to put extra money into their savings.
If you're going to save, why not make sure those savings grow on their own in a high-interest account? Your money can earn regular interest plus premium-period interest with Scotiabank's MomentumPLUS Savings Account, and if you also hold an Ultimate Package account you can earn additional annual interest. It's a great way to motivate you to leave your savings account alone so it can continue to grow.
Earn While You Spend
Credit cards are a great tool for both building credit and accessing loyalty rewards. More than half of Canadians (54%) are using their credit cards most frequently for payments during the pandemic, followed by their debit cards (31%).
ScotiaRewards® is one of the most flexible rewards and loyalty programs in Canada. If you're looking to plan a trip post-pandemic, you can use your ScotiaRewards points to book flights, hotels, cruises, car rentals, tours and more. And when it's time to head back to the movies, the SCENE® entertainment loyalty program helps you watch new movies for free.
The next time you reach for your wallet, keep in mind which card earns you the most rewards on your purchases.
Expect The Unexpected
The job losses and economic instability that followed the start of the pandemic were unexpected, but if there's a lesson to take from the misfortune that so many Canadians faced, it's that having an emergency fund is crucial.
Financial emergencies aren't fun to think about, but being unprepared in the event of a crisis (again) would be even worse. Financial experts recommend having anywhere from three to six months of living expenses saved up so problems — like suddenly being unable to work, needing urgent repairs to your home or car or having to quickly move when you weren't planning on it — are manageable.
While this might not be accessible for everyone, it's a great goal to shoot for eventually. Even if you're contributing $25 a month to your emergency fund, that's better than nothing and when the time comes, you'll be glad you did.
Make More Thoughtful Purchases
Lockdown has taught many people to practice eliminating non-essential purchases. While it's not always possible to avoid discretionary spending, the more you practice saying "no" to impulsive purchases, the easier it becomes to save a little extra each month.
Another way to cut down on spending is to be mindful about what you buy. Mindful spending means being intentional about where your money is going, and making choices that align with your values.
For example, if you choose to cook food at home instead of getting takeout because you want to avoid plastic packaging, you've just made a mindful decision that'll also save you money.
It's much less likely you'll make impulsive purchases if you're considering what impact you want your dollars to have.
Get The Right Financial Advice
No matter how you spin it, finances can be overwhelming, and sometimes it's best to consult the experts. That's why Scotiabank designed the Scotia Advice+ Centre, an online hub that provides financial resources for people looking to improve their financial health.
Through the centre, you can access a comprehensive self-help approach to financial planning. You'll also have the option to book an in-person appointment with a Scotiabank advisor for more personalized advice.
While everyone's financial situation will look different as they come out of lockdown, chances are you've picked up a good behaviour or two you'd like to keep post-pandemic. With these tips in mind, that's totally possible.
To learn more about keeping up positive money habits, speak to a Scotiabank advisor, visit their website or follow Scotiabank on Instagram, Facebook and Twitter.
This content is for general informational purposes only and does not constitute financial, investment, legal, tax or accounting advice.
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