How to improve your savings: Two tips from my father

My dad didn’t talk very much about money when I was growing up — but he did have a few sayings he would repeat throughout the years. We didn’t have long discussions about borrowing, interest rates, or investing. However, my dad taught me how to save money as I grew up and got my first job.

I had a plan for those first paycheques as a young person with no financial responsibilities to consider. It wasn’t a plan to save, but instead a plan for what items I was going to buy and which activities I would do with my friends on the weekend. However, that plan didn’t last long before my dad gave me two tips about saving.

1. Save for the unexpected

My dad talked to my brother about saving years before. While I didn’t understand what my dad was saving for, he would often say: “It’s always best to save for a rainy day.”

I couldn’t imagine why you would need more money for a rainy day at the time. However, I learned that it’s not really about the rain as the years went on — it’s about when times are tough and the road you planned to take has an unexpected detour. The expression meant that it’s important to save some of your money for unexpected challenges in the future.

This saying truly started to resonate as I grew up, started a family, and bought my first car and home. Nothing goes exactly as expected for everyone. It’s better to be prepared for when your car doesn’t start, your fridge stops working, or the ceiling in your living room starts to leak.

Saving for the unexpected isn’t always fun. However, it will help keep your debt down and make sure you don’t need to rely on your credit card during emergencies.

2. Balance your needs and wants

My dad also liked to say: “Buy what you need rather than what you want, because the two don’t always align.”

As I grew up, I discovered the truth to this saying. While I’d love to spend our growing savings account on a long vacation in Europe or on making improvements to our home, sometimes these wants simply have to wait.

However, this doesn’t mean you can never live life to the fullest or have fun. It’s about spending some time thinking carefully about what is most important to you. You can take the trip when your vacation fund has reached your target amount, and your rainy-day fund is prepared for the unexpected.

It’s important to remember that it’s okay to have multiple savings accounts dedicated to covering your needs and your wants. If you know you want to take a break from the winter next year and book a trip to somewhere warm, review how much that trip will cost so you can save the money in advance. The trip will be more enjoyable when you know you’re not going to face a significant credit card bill after you return home.

Take the next steps

These two tips from my dad helped me learn how to save for unexpected events and put my needs before my wants. Keep sharing your advice, discussing financial literacy, and the importance of saving for a rainy day in honour of Father’s Day. One day your children will understand the value of your advice.

While teaching your children financial literacy is important, so is your own financial health. If you are struggling with financial stress, contact a License Insolvency Trustee. They will help you review all your options and choose the debt relief solution that works best for you. Together, we can help you take back control over your finances.