It can be really hard to focus on saving cash when the world is going through an economic downturn. Even American banks are going under or being bought by larger institutions. Yet Canadians aren’t even in a recession yet. So, you wouldn’t be blamed if you felt a bit scared at what the future might hold.
But there are certainly ways to prepare. In fact, there are ways so save cash to put aside, investing it to make more funds in the case of an emergency — ways that can save you cash today. So, let’s get right to them.
Pay debt on time!
If you have loans, pay them. It doesn’t have to be a huge influx, just the minimum. What it does have to be is on time! If you owe money, then you’re already taking on interest. That alone should be dealt with as soon as possible. But just because you can’t pay off the entire thing now doesn’t mean you should ignore it all together.
To get around this, create automated contributions that amount to at least the minimum payments. This will prevent you creating, even more debt to pay back over time. This will save you money in the long run and help you pay off your debt even faster.
Use your credit card
Of course, I was just talking about debt, so to do this section, you need to pay off your credit card down to zero beforehand. That being said, given that interest can be around 19%, this should be your first priority. Once paid down, however, there are ways to save even more cash by using your credit card.
I use mine for literally everything. A tea, lunch, a pack of gum — it doesn’t matter. I use that credit card and pay it off immediately. This helps me create rewards points, which I can then go on to use for other purchases. This has included travel in the past, which I try to do on an annual basis.
However, there is nothing holding you back from taking on deals with a new credit card company. You can lock up a deal that includes $0 in annual fees for the first year and likely gives you an influx of rewards points as well. That’s cash in your pocket and points to spend. So, find a great deal and then cancel your old card.
Save on delivery
Another point my family has made is to stop getting deliveries as much as possible. Shopping local isn’t just a good thing to do for your local economy. It’s also going to save you in the long run. While it might be nice to order in food, for example, just call and do a pick up instead!
The same goes for clothes, grocery items — anything, really. Stop ordering to your home and just pick it up yourself. These fees add up on a consistent basis if you do this as part of your daily life. That’s consistent cash you can be putting aside each month.
Make it even more
Let’s say you’ve started paying down your debts and no longer have that to worry about. You have a new credit card that’s saving you cash and putting aside more for rewards. Finally, you’re saving about $100 per month in fees (seriously) when combining everything from clothes to food.
This could add up to around $150 or more each month to invest. If there’s one I would consider right now, it’s a bank stock. And Canadian Imperial Bank of Commerce (TSX:CM) is a strong option, given that it trades down 21% in the last year and at 10.66 times earnings as of writing.
You can bring in a dividend yield at 6.16% as of writing, which comes to $3.40 per year. If you put aside $150 per month, that would amount to $1,800 per year in investments. Here’s how much that could make you today from CIBC stock.
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In just a year, you could bring in another $112.20, adding to your passive income. And reinvesting would only have it climb from there.