Canadians saved around five times more of their disposable income in 2020 compared to 2019, data recently released by Statistics Canada reveals. In 2020, Canadian households saved an average of $5,816, compared to just $1,144 in 2019. Nonetheless, Canada’s impressive growing savings rate (the total amount of net savings as a percentage of net household disposable income) isn’t set to last with a gradual decline expected to occur during the next two years. Fortunately, helpful money-saving tech apps and tools, along with interest-earning savings accounts, are helping Canadian’s maximise their savings.
Fluctuating savings rate
During the second quarter of 2020, the saving rate of Canadian households peaked at 28.2%, before falling to 11.5% in the year’s last quarter. Most Canadian workers also started earning more money in 2021 compared to the year prior with the average full-time salary being $65,773. If, however, the savings rate returns to pre-pandemic levels (1.9%-3.6%), the average Canadian household is expected to save anywhere between $1,249-$2,367 after paying for bills, food, and the odd vacation.
Save money with helpful tech tools
Although saving money is never easy, tech tools are now making it easier than ever to take charge of your finances. For example, the Shopback app gives you access to cashback deals across over 500 websites, so you can save money while shopping with minimal effort. Simply make your purchase and you get cash back within 48 hours. Alternatively, Qapital is another handy app that helps you stick to your savings goals. For example, with the app, you could set a “summer vacation” savings goal, along with a rule that every time you buy a cup of coffee, the app automatically puts a set amount of money into the savings fund. And, over time, as you see your savings grow, you’ll find it easier to stick to your financial goals and resist impulse spending.
Best places to put your savings
By putting savings in interest-earning accounts, Canadians can maximise their savings and yield a decent rate of return. A high-interest savings account (HISA), for example, is designed to grow funds fast. While standard savings accounts provide an annual interest rate of around 0.06%, a HISA has a rate of around 2%. So, in this case, keeping $4,000 in a HISA will yield an impressive $80 return by the end of the fiscal year. Alternatively, most conventional employers offer their full-time employees the option of a Registered Retirement Savings Plan (RRSP). An employer-matched RRSP, in particular, involves all or a percentage of the employee’s RRSP contribution being matched by the employer. Employer-matched RRSPs therefore provide employees with an easy way to regularly save small portions of their paycheck and build their retirement savings substantially over time.
It’s no secret saving money is a challenge for most Canadaians. Fortunately, by taking advantage of useful money-saving tech tools and the right interest-earning savings accounts, Canadians can have an easier time taking charge of their finances and growing their savings.