3 effortless steps to help you save money and reach your goal

Whether it's to pay off debt, save for a house, or plan your dream vacation, these three effortless steps to saving money can help you reach your goal.

First, you need to set a realistic goal and be disciplined. If you expect to save up $20,000 in a year, you’ll be living on love and 50 cent noodles. Adjusting your goal to three years is much more realistic and more likely to be attained.

Before determining the amount you can afford to put away, it’s important to establish a budget. This step is the easiest. There are templates available online that are automatically populated with the equations for budget calculations. It’s almost a “no brainer”—you simply enter your data i.e., income and expenses, and the program does the rest. Otherwise you can do it by hand.

• If you're living with a significant other, calculate each of your incomes, expenses and debts. After this step, you will see what surplus you have left at the end of the month.

Now is the time to show discipline and make cuts wherever possible.

• In addition to fixed expenses (mortgage, leases, loans, etc.), look at different areas where you can make immediate cutbacks. For example on food, alcohol, restaurant dining, pharmacy items, clothing, personal expenses and recreation.
• Add up the total amounts. If your eyes widen with amazement at all the exaggerated expenses, breathe a sigh of relief because saving should be relatively easy. If not, you’re going to need to use a little more creativity to stuff the piggy bank.

This is where you determine just how much you can realistically set aside and the timeline necessary to reach your goal.

• Cut back on non-essential and trivial items. For example, pack your lunch every day instead of going out; you will save an average of $250 or more per person annually.
• Use loyalty cards (credit or otherwise) to earn bonus points that can be turned into discounts such as groceries, gas and pharmacy items. You can easily save $1,800 to $3,000 per year with customer loyalty incentives.
• According to 2009 statistics, the average Canadian household spent nearly $4,000 annually on recreation expenses alone, even during the economic downturn.
• Fashion and clothing expenses account for an average of $1,000 to $1,500 per person each year in Canada.

If you're still finding it tough to cut back on expenses, here are additional areas you can investigate for potential savings:

• Review your insurance policy. Before settling on an insurance provider, shop around or talk to an insurance broker. It can save you hundreds of dollars.
• Pay your debts starting with the debt at the highest interest rate, even if that means making minimum payments on others.
• Ask your financial institution to consolidate your debts and to transfer your money into an account or savings program with early withdrawal penalties.
• Eliminate your home phone line if you already have a cell. Why pay twice?
• Make direct deposits each week. The deposits will be smaller but will be easier to manage and will accumulate fast.
• Stay away from credit cards and any other offers enticing you with "buy now and pay later" promotions.