Everyone loves having a little more money in their bank account. Plus, in an economy that can feel topsy-turvy, learning how to save money in Canada and make the most of money-savings tips can make a big difference in how you feel about your financial security.
Whether you’re saving for a rainy day, a vacation, a house deposit or just to make ends meet, there are dozens of things you can do each day to grow your bank balance.
From gas and groceries to utilities and everyday expenses, let’s look at the many ways (45 ways, to be specific) that you can save money in Canada.
What is the best way to save money in Canada?
The best way to save money in Canada is to open a high-interest savings account. These online accounts pay a high rate of interest on every dollar you deposit, and they use the power of compound interest to help your balance grow faster.
Once you’ve opened your account, you can set up a recurring direct deposit from your chequing account to your savings account.
Set the transfer up to be sent when you get paid each week or fortnight, so that a portion of your paycheque goes straight into savings — putting 20% of your salary into savings each week is a good goal to aim for.
You can make extra deposits to your savings account whenever you have some spare cash, then just sit back and watch your money grow.
But there are plenty of other simple ways to save money in Canada. Keep reading to find out what they are.
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How to save money from your salary
Each week your paycheque drops into your bank account, and each week all that money has disappeared on expenses before you know it. Sound familiar?
Saving money from your salary is all about having a plan. Here’s what you need to do.
Create a budget
Yeah, we know — boring. But making a budget is the first step towards becoming a smart saver.
Grab your latest bank and credit card statements to work out how much you spend each week and where your money goes. Then you can put together a realistic spending plan and identify areas where you can cut back.
Use the 50/30/20 rule
The 50/30/20 rule is a popular strategy for saving money. It involves breaking down your paycheque as follows:
- 50% of your salary is used to cover all your essential living costs, like groceries, utilities, gas and rent/mortgage payments.
- 30% goes to the things you want but don’t necessarily need, like eating out and getting takeout, streaming services and attending concerts.
- 20% goes to your savings.
It’s a rough target to aim for, but you can try to save an even larger percentage of your salary if you want.
Set a savings goal
What are you saving for? What’s your time frame? Having a clear goal in place will give you something concrete to aim for and help you be disciplined with your spending.
Use our savings calculator to work out how quickly you can reach your savings goal.
Set up a recurring deposit
Do you always intend to set money aside in your savings account each week but rarely follow through? Take matters out of your hands by setting up a recurring weekly transfer from your chequing account to your savings account. Aim to transfer at least 20% of your pay directly to savings and you’ll be surprised just how quickly your balance grows.
How to save money on gas
Gas is one of those everyday expenses that’s impossible to avoid, and sometimes it feels like you’re re-filling your tank every other day. The good news is that there are plenty of simple things you can do to ensure that your car sips rather than guzzles fuel.
Use an app
Need help finding cheap gas prices near you? Use an app like GasBuddy to check a map of the best gas prices in your area. It’s free and easy to use, you can report cheap prices to help other drivers, and the app also offers gas-saving driving tips.
Change your driving habits
The way you drive has a big impact on how much gasoline your car consumes. Be a more fuel-efficient driver by accelerating gently, avoiding stop-start traffic, coasting to a stop when possible and avoiding high speeds.
Natural Resources Canada gives the example that a vehicle travelling at 120km/h uses about 20% more fuel than a vehicle travelling at 100km/h. Over the course of a week, month or year worth of regular driving, that extra 20% will leave a big dent in your bank account.
Know the best time to fill up
Did you know that gas prices tend to follow a weekly cycle? You’ll generally find the cheapest gas on Tuesdays and Wednesdays, but prices usually rise on Thursdays and Fridays as the weekend approaches.
Reduce weight and wind resistance
According to Natural Resources Canada, a mid-size car uses an extra 1% of fuel for every 25kg of weight it carries. So rather than driving around all the time loaded up with heavy sports equipment or other gear, clear out your trunk to save money on gas.
Think about your car’s aerodynamics too. Roof racks, bicycle racks and roof cargo boxes can have a big affect on the aerodynamic drag on your vehicle and therefore its fuel economy, so remove them when not in use.
Stay on top of maintenance
Get your car serviced regularly to make sure it is running as efficiently as possible. It’s also worth checking your tire pressure at least once a month to ensure that tires are properly inflated — Natural Resources Canada says that if your tires are under-inflated by 56 kilopascals (8 pounds per square inch), fuel consumption rises by up to 4%.
Consider alternative transportation
There are a few other ways to save money on gas. Depending on your circumstances, you could also consider:
- Carpooling to work or regular sports/gym sessions with a friend.
- Taking public transport.
- Cycling or walking to work.
- Avoiding peak hour traffic.
How to save money on groceries in Canada
Is your weekly grocery bill enough to make your eyes water? Whether you’re shopping for yourself or feeding your family, use these tips to help
Check your pantry and fridge first
Before you head to the grocery store, check what you have in your pantry and fridge at home. This will stop you from buying excess items you don’t need, and it’ll also make it easier to plan your meals for the week ahead.
Make a weekly meal plan
At the start of the week, sit down with your family and plan your meals for the week ahead. You can then put together a shopping list and fill your cart with everything you need for all your meals.
Doing a weekly shop helps you avoid those impulse buys that so often happen when you’re just ducking into the store to pick up dinner on your way home from work. They also help remove the temptation to pick up an expensive mid-week takeout instead of cooking a cheaper meal at home.
Buy in bulk
You’ll get better value for money when you buy non-perishable items in bulk. We’re talking things like rice, pasta, toilet paper, canned food — basically anything that you know you’re going to use, that isn’t going to go off, and that you have enough space to store.
Buy generic brands
Shopping for fridge and pantry staples? Buying generic instead of big-name brands can save you up to 30%. Shopping at discount chains like Food Basics, No Frills, FreshCo and Real Canadian Superstore is another easy way to save money on groceries.
Use coupons and loyalty programs
Look for coupons online and in flyers so you can take advantage of discounts whenever possible. Apps like Flipp and Checkout 51 are handy resources to help you find the latest coupons. You can also find savings by signing up for customer loyalty programs like PC Optimum or Scene+.
Buy fresh produce when it’s in season
When fresh produce is in season and widely available, it’s cheaper to buy. Doing a little research into what is in season at different times of the year can lead to big savings.
Earn cash back
Shopping with a cash back credit card is a simple way to get free money from your grocery purchases. Look for a card that offers a high earn rate on groceries, like the BMO CashBack World Elite Mastercard, and make sure you can pay your credit card bill off in full before the interest-free grace period ends.
If you don’t want a credit card, consider a prepaid card that allows you to earn cash back on eligible purchases. KOHO, the EQ Bank Card and the Neo Everyday Account are all options worth considering.
Check the unit price
Many grocery stores display per-unit prices on the price tags for different items. These make it much easier to compare two products of different sizes to work out which offers the best value.
For example, let’s say you’re trying to decide between two bottles of shampoo:
- Bottle A is $16 for 940mL, which the price label shows is $1.70 per 100mL.
- Bottle B is $10.50 for 660mL, which is $1.59 per 100mL and better value.
Check the price breakdown to decide which product is a better deal.
How to save money on utilities
Electricity, water, heating, phone and internet are all essential utilities, but there are still several simple ways you can save on these ongoing costs.
Unplug items and turn off lights
Reduce “phantom power” costs by unplugging electronic items when they’re not in use. This can cut down from the energy used by standby power, which could be up to 10% of your electricity bill. Remembering to turn off the light when you leave a room is another simple way to keep power costs down.
Buy ENERGY STAR certified appliances
From refrigerators and washing machines to televisions and dishwashers, ENERGY STAR certified products are energy-efficient products that use less power. For example, an ENERGY STAR certified TV will use 25% less energy.
So when you’re shopping for new appliances to use around the home, look for the little blue ENERGY STAR label. You can also switch to ENERGY STAR certified LED bulbs, heating and cooling systems, water heaters, windows, doors and more.
Conserve water
There are several simple, everyday things you can do to save money on your water bill, such as:
- Switch to a water-saving shower head and a low-flow toilet.
- Fix any leaks from indoor and outdoor faucets or pipes.
- Get an ENERGY STAR certified washing machine — it will use 33% less water than a standard model. Washing in cold water will also reduce heating costs.
- Take shorter showers.
- Don’t leave the tap running while brushing your teeth or shaving.
- Only run a washing machine or dishwasher cycle when you have a full load.
Stay on top of furnace maintenance
Regardless of whether your furnace is oil-fired or uses natural gas or propane, get it serviced regularly to ensure it is running as efficiently as possible. When you’re ready to replace your furnace, consider switching to an electric heat pump to reduce energy costs.
Get an energy audit
You may also want to consider getting an EnerGuide home evaluation. This will provide you with a report on the energy efficiency of your home and the possible upgrades you could make to save on energy costs.
Compare phone and internet plans
Review your cell phone and internet plans every six months or so to check whether you’re getting good value. If there’s a better deal out there, contact your current provider to see whether they’ll match it or beat it. If they won’t and you’re not locked into a contract, make the switch.
How to save money on everyday expenses
There are more ways to cut back on your everyday expenses than you might expect.
Round up purchases
Many banks and fintechs in Canada offer optional round-ups. This means that whenever you make a purchase with your debit card, it’s rounded up to the nearest dollar, with the excess amount deposited into your savings account. So if you buy a coffee for $5.50, you’d pay $6 in total — $5.50 to the cafe, and $0.50 to your savings account.
In some cases, you can choose to have your purchases rounded up to the nearest $5 or $10, boosting your saving power.
Switch or cancel
Make a list of all your regular expenses and work out which ones can be reduced or even eliminated altogether. For example:
- Instead of signing up for auto-renewal of your car insurance or home insurance each year, compare quotes from a few providers to make sure your existing insurance company is offering you a good deal.
- Instead of paying for multiple streaming services at once, choose one. Then when you’re ready to find some new shows, cancel your current service and switch to a new one.
- You can enjoy big savings by switching gyms, so see if there are cheaper options in your area. Make sure you’re also working out enough to justify the cost of your membership.
Eat at home
Everyone loves a meal out, but dining out multiple times a week is bad news for your bank balance. Try to eat at home more often and turn dining out into something reserved for special occasions. And if you order takeout, pick it up yourself — don’t fork out extra through a food delivery app.
How to save money as a student
If you’re studying full-time, making ends meet is often easier said than done. But no matter how tight your budget, there are still a few simple ways to save money as a student.
Make the most of student discounts
From public transportation to your local coffee shop and a wide range of retailers, always check if there’s a student discount available. Keep your student ID with you (or add it to your mobile wallet) so you can prove your student status.
Many banks also offer chequing account monthly fee discounts to students, so shop around to see what’s available.
Track your spending
Create a budget to work out exactly how much you have to spend on individual expenses each week. Use a budgeting app or your bank’s mobile app to keep track of your spending and identify areas where you can cut costs.
Get a part-time job
Whether you’re waiting tables or stacking shelves, a part-time job can provide you with a much-needed income boost to help get you through your student years. You’ll obviously need something with flexible hours that allows you to work around your classes, but you can look for a job on campus for added convenience.
Buy second-hand books
Don’t fork out the full sticker price for new textbooks. Search online for second-hand textbooks, or ask other students doing the same degree whether they’d be willing to sell the books they no longer need. You can also look for electronic editions that generally come with a lower price tag.
Find affordable entertainment
Cheap movie nights, picnics in the park, happy hour, live gigs from local bands — there are plenty of cheap ways to have a good time if you know where to look. It might not be quite as glamorous as the day or night out you want to have, but there are plenty of affordable entertainment options to help you avoid blowing your budget.
Take advantage of tax deductions and credits
You may be able to claim moving and childcare expenses as tax deductions. Tax credits may also be available for expenses like tuition fees and student loan interest, so check with the CRA or your accountant to find out how you can pay less tax.
How to save money on taxes in Canada
The tax man always cometh, but there are several simple (and perfectly legal) things you can do to reduce your tax bill.
Open tax-friendly accounts
A tax-free savings accounts (TFSA) allows you to avoid paying income tax on any interest earned or any capital gains from investments.
A registered retirement savings plan (RRSP) allows you to avoid paying any tax on the income you earn from the investments and savings in your RRSP until you make a withdrawal — which happens once you’ve retired and will be in a lower income bracket. Your RRSP contributions are also tax deductible.
FHSAs and RESPs also provide a range of tax benefits, so research the registered account types that suit your needs.
Know what you can claim as a deduction
Check with the Government of Canada or your accountant to find out which deductions, credits and expenses you are eligible to claim to reduce your tax. From child care expenses to the registered pension plan deduction, there are a wide range of expenses you may be able to use to lower your tax bill.
Split your income
Income splitting is a strategy spouses and common-law partners can use to reduce their taxable income. The person in a couple that earns a higher income transfers a portion of their income to their partner to reduce the total amount of tax they have to pay. It’s a little complicated but can be an effective tax reduction method, so speak to your tax advisor about what you need to do.
How to save money fast
If you’ve got a short-term savings goal you need to reach, here’s how to achieve it as quickly as possible.
Cut back on all non-essential expenses
Start by putting together a weekly budget and identifying areas where you can cut costs. For example:
- Drink instant coffee instead of buying a latte every day.
- Cancel that gym membership you never use.
- Don’t sign up to multiple streaming services at the same time — pick one.
- Pick up takeout food and groceries rather than having them delivered.
- Take work lunches from home rather than buying lunch every day.
These are all simple things and while they might mean missing out on a few luxuries, they can make a big difference to your bank balance.
Open a high-interest savings account
Put your money into a savings account that pays a high rate of interest. Look for savings account promo offers that provide a high bonus interest rate for a limited introductory period, usually 3 to 6 months, and which are perfect for short-term savings goals.
Set up a recurring transfer to your savings account
Automate your savings deposit with a recurring transfer from your chequing account to your savings account every time you get paid. This will ensure that you keep topping up your savings regularly. It’ll also remove the temptation to spend your income instead of saving it.
Shop around for a better rate
Review your account interest rate regularly to see if another bank is offering a better deal. Finder makes it easy to compare and find the best savings account interest rates.
How to save money fast on a low income
The tips above about saving money fast apply no matter how much you earn. But if you’re on a low income, there are a few extra steps you can take to boost your bottom line.
Review your budget
If you only have limited income to work with, a budget is crucial to staying financially healthy. Once you have a clear idea of what you spend your salary on each week, you can work out how much you can afford to spend on each essential expense — and identify areas where you can cut back.
Find out if you’re eligible for any financial support
Use the Government of Canada’s Benefits Finder to work out if you’re eligible for any government financial assistance. For example, the Canada Workers Benefit and Canada Child Benefit may provide financial support, while you may also qualify for benefits from your provincial government.
Start a side hustle
There are lots of easy ways to make money online, including completing surveys or selling unused possessions. If you’ve got any particular skills or qualifications, you might want to consider working part-time as a freelancer or virtual assistant. You could even consider offering your services as a dog walker or pet sitter in your spare time — there are plenty of money-making opportunities to explore.
Switch to a no-fee bank account
Hands up if your chequing account comes with a monthly fee. There are several no-fee chequing accounts from reputable providers in Canada, so don’t be afraid to switch banks. It might only save you somewhere in the ballpark of $5 to $20 per month, but every little bit helps.
- Earn 4.00% interest for 12 months
- No monthly account fee
- Free ATM withdrawals across Canada
- No transaction fees
- No e-Transfer fees
- Earn a $300 bonus
- $0 account fee
- Unlimited free transactions
- $0 Interac e-Transfers
- No minimum balance requirements
- No monthly fee
- Unlimited day-to-day transactions
- No minimum balance requirement
- Overdraft protection on approved credit
Take control of debt
Paying off high-interest debt from credit cards or payday loans debt will help you save money much faster in the long run — even if it might not seem like it right now. Seek out free credit counselling near you to get financial advice on how to get out of debt and get your finances back on track.
Bottom line
No matter whether times are tough or you just want a little more financial security, there are dozens of simple things you can do every day to save money in Canada. So tighten those purse strings, pinch those pennies and start building a bigger bank balance today
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