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Why You Need Savings Goals to Help Avoid Debt

You know that having a savings fund is a good idea for emergencies, future goals and everything in between. But, do you know that saving now can also help with your child’s debt in the future too?

Check out what our Licensed Insolvency Trustees (LITs) had to say in this episode of our BDO Debt Solutions Podcast:

  1. Take advantage of time

When your children are young and expenses are high, it’s easy to put off important financial decisions. However, setting savings goals can help your kids succeed in the future and help them avoid student debt.

Open a long-term savings account or an RESP for your child. You don’t need to make large contributions to make a big difference. Use this RESP calculator to see the projected costs of your child’s education and estimate what you should contribute each month. You can even request contributions from family members on special occasions.

  1. Pump up your emergency fund

Repairs, illness, injury, joblessness, mat leave…all of these things require extra cash on hand. Start an emergency fund and aim to put aside three to six months of expenses. Go over your budget and see where you can cut costs and save extra money. Check out this blog post from Squawkfox for tips.

  1. Don’t rely on credit cards

It’s a tough habit to break which requires continuous commitment and a few helpful tools:

  • Calculate all the times in a year when you spend the most such as Christmas, birthdays, vacations and back to school.
  • How much did you spend during those times? Calculate the total and divide it by 12 months.
  • Add that amount to a savings account each month so you can keep it aside for these special events
  • You might also want to add a spot in your budget for home repairs, renos and major purchases.

To stay on top of your debt relief and savings goals, revisit your budget often and revise it when necessary. How will you make savings a priority this September?

Tune into our podcast for more tips or find us on Twitter #DebtSolutions #Budgeting #StudentDebt

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