The first step in the process of becoming financially free is deciding that a portion of all income you earn is yours to keep and automating the savings process so that you do not have to think about it.
The reality is that a large number of Canadians only have enough savings to live for one month or less in the event of a financial emergency according to a new survey. In 2014 46 Percent of Canadians experienced a financial emergency, and only half were able to afford it.
An emergency fund should be setup in case of events such as:
- Job Loss
- Change in financial status
- Unexpected medical expenses
- Home and car repairs
To pay for unexpected expenses 1/3 had to borrow money from family friends or take out loans,
using a line of credit or a credit card. Those who were unable to borrow had to adjust their
current budget or used savings intended for other purposes such as education, retirement etc.
The average saving fund is only $2,000 as the data in the BMO Rainy Day Report cites.
Once the emergency fund is setup the investment in your financial future can begin.
PROBLEM
One of the most common roadblocks that stop people from saving is they do not believe they
have money to spare as the money that comes in is already committed to bills, debt etc.
They tell themselves that they will start saving after they pay off their debts.
6 months turns into 5 years which turns into 15 years and then the law of compounding interest
cannot be used to their maximum benefit.
SOLUTION
The Save More For Tomorrow plan was implemented through research done with a company
that when analyzed had a very low participation rate in their 401K Retirement plan.
Employees were given the option to join the plan via the traditional route of speaking to
a financial planner. The majority of the employees opted to skip the meeting and not join.
Save More For Tomorrow was an informal plan, done without a financial planner where
savings would be deducted directly from the paycheque into a separate account on pay day.
The program savings percentage would start at 3.5% and increase up to 4 times over 40 months.
The Results were amazing. Participation of the save more for tomorrow plan, without a financial
planner necessary was a shocking 80% and a large majority continued through the 4 pay raises.
36 Percent of the program participants had an income of less than $25,000/year
At the end of 40 months the avg participant was saving %13.6 percent of their net pay for their
retirement. To take advantage of this plan you can simply tell your employer to deposit a percentage of your pay into a dedicated savings, RRSP, or TAX free savings account.
The reality is that a large number of Canadians only have enough savings to live for one month or less in the event of a financial emergency according to a new survey. In 2014 46 Percent of Canadians experienced a financial emergency, and only half were able to afford it.
An emergency fund should be setup in case of events such as:
- Job Loss
- Change in financial status
- Unexpected medical expenses
- Home and car repairs
To pay for unexpected expenses 1/3 had to borrow money from family friends or take out loans,
using a line of credit or a credit card. Those who were unable to borrow had to adjust their
current budget or used savings intended for other purposes such as education, retirement etc.
The average saving fund is only $2,000 as the data in the BMO Rainy Day Report cites.
Once the emergency fund is setup the investment in your financial future can begin.
PROBLEM
One of the most common roadblocks that stop people from saving is they do not believe they
have money to spare as the money that comes in is already committed to bills, debt etc.
They tell themselves that they will start saving after they pay off their debts.
6 months turns into 5 years which turns into 15 years and then the law of compounding interest
cannot be used to their maximum benefit.
SOLUTION
The Save More For Tomorrow plan was implemented through research done with a company
that when analyzed had a very low participation rate in their 401K Retirement plan.
Employees were given the option to join the plan via the traditional route of speaking to
a financial planner. The majority of the employees opted to skip the meeting and not join.
Save More For Tomorrow was an informal plan, done without a financial planner where
savings would be deducted directly from the paycheque into a separate account on pay day.
The program savings percentage would start at 3.5% and increase up to 4 times over 40 months.
The Results were amazing. Participation of the save more for tomorrow plan, without a financial
planner necessary was a shocking 80% and a large majority continued through the 4 pay raises.
36 Percent of the program participants had an income of less than $25,000/year
At the end of 40 months the avg participant was saving %13.6 percent of their net pay for their
retirement. To take advantage of this plan you can simply tell your employer to deposit a percentage of your pay into a dedicated savings, RRSP, or TAX free savings account.
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About the author: Sam Kakembo is an international investor, entrepreneur, and known as one of the most sought after Branding, Lifestyle Design, and Real Estate Re-developers in the online business community. He is an expert in creating wildly profitable online promotions that also skyrocket brand loyalty and good will without being obnoxious or even remotely "salesy". His e-letter and crash course is about using the experiences from his life and network to help you achieve more freedom.
All Weather: A Passive Fund Designed for Any Economic Climate
The House Has The Edge
How Ted Johnson, Ex-UPS Employee Banked $70 Million
About the author: Sam Kakembo is an international investor, entrepreneur, and known as one of the most sought after Branding, Lifestyle Design, and Real Estate Re-developers in the online business community. He is an expert in creating wildly profitable online promotions that also skyrocket brand loyalty and good will without being obnoxious or even remotely "salesy". His e-letter and crash course is about using the experiences from his life and network to help you achieve more freedom.
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