For most people, there are two financial aspects that destroy saving potential: debt and taxes. The scary part is that the lack of savings is prepared to attack when finances are the most vulnerable. Without significantly hampering the income that is allocated for living expenses, there are ways to find money to put away for retirement.
Debt is a huge expense. It is not uncommon for twenty-somethings and even thirty-somethings to have monthly payments going towards a student loan, a car loan, and a mortgage. A comfortable estimate for those three payments would be around $2000. For a person earning $3000 net monthly, already 67% of the income is consumed by debt. Also, take a moment to consider how much of the gross income was already consumed by taxes.
In the end, the chunk of change you have left over for utilities and groceries is not significant, and the amount available to place into stocks or GICs is less than negligible.
The best method of relieving yourself of the burdens of debt and taxes is to be proactive. Find loopholes and the best deals to save money. Investigate items that have the potential to be tax deductible, such as public transportation receipts and RSPs. Make use of financial planners at banks, and try to find a financial institution that can consolidate any loans and provide a kinder interest rate.
To lower the consumption of debt from 67% to 65% is more significant than you may think. With the 2% alteration, the person in the example would enjoy a savings of about $60/month. By lowering debt consumption by 10%, they would save $300/month. By increasing your tax deductions, you'll save even more.
Imagine having 10% more money to stow away for retirement-that 10% can provide an important level of security at a vulnerable stage of life.
Use the resources and information around you at banks, on the internet, through colleagues, etc. provided in order to secure a financially sound future.
