Making Savings A Priority For 2025

Is saving a priority for you and your family? Whether you’re planning a cross-Canada road trip, looking to buy a new home, fund for your retirement, or build up your emergency fund, saving money requires setting goals, making a plan, and having the discipline to execute it. It also helps to know what financial tools and services are available to help you get on track with achieving your goals.

Set a purpose, budget, and timeline

There are many reasons to want to set aside and save money, so your first task is to decide your exact reasons for saving. Have a clear definition of your purpose for saving with your end goal or goals in mind – and yes, you likely will have multiple things you’re saving for at the same time. For each goal, set out a purpose and a plan. This will help you stay focused and on track, without relying too heavily on debt or credit to fund your wishes.

Some possible savings goals may include:

• A home purchase or renovation
• A new vehicle or appliances
• A well-earned vacation or trip
• Tuition and education fees for yourself or a child
• Your retirement income fund
• An emergency fund for “just in case” needs
• Or any other goal or need specific to your life

Once you have your goal in mind, it is time to review your financial situation. Begin by looking at your income and budget, then give close consideration to what you can and need to save in order to reach your target.

You’ll also want to clear up your debt, or at least make it more manageable – this is especially true if you owe a significant amount credit card debt. Once you have the figures in front of you, you may need to make adjustments to your spending habits or set different goals.

With your finances sorted, you’ll then be able to set out a timeline. The length of time available to you depends on your finances and your goals; saving for a new phone may take a few months while saving for your retirement is a decades-long affair.

No matter the length of your timeline, be sure to set periodic milestones and check-ins along the way. With life events, inflation, or unexpected costs and expenses, you may find it necessary to make changes along the way.

Take account of savings account options

With that set, it’s time to review your savings options. Depending on your goals and needs, your everyday banking account may not be your best option. A dedicated savings account can help make it easier to save, track, and manage your savings. 

Some accounts to consider based on your timeline and goals are as follows:

• Short term – less than a year away

Choose a dedicated savings account that offers competitive growth rates and easy access to funds when ready or needed.

• Medium term – one to five years

For less immediate needs, consider a term deposit or a Tax-Free Savings Account. Both provide a balance between higher rates of return and security.

• Long term – five years and longer

A longer timeframe offers more choice, including long-term registered plans or investing in the market for greater returns, particularly if investing in mutual funds^ᶲ, ETFs^ᶲ, stocks^ᶲ, and bonds^ᶲ.

Registered plans for long-term savings and growth

Long-term goals – such as a down payment on a home, a child's education or your retirement – often require more sophisticated and in-depth planning, with an investment and growth mindset. You can explore the various registered savings plans – each set up to help you achieve specific goals with growth and tax-saving benefits.

Four of the key registered accounts to consider are:

• TFSA: The Tax-Free Savings Account is a flexible savings option designed to support a wide range of financial goals with tax-free growth.
   
• FHSA: The First Home Savings Account offers Canadian residents a tax-sheltered way to save for a first home purchase.
   
• RESP: The Registered Education Savings Plan allows parents and families to save funds for a child’s future cost of education.
   
• RRSP: The Registered Retirement Savings Plan offers long-term tax-deferred savings growth to help you with your future retirement income in a RRIF (Registered Retirement Income Fund).

Considerations for building your emergency fund 

Having money set aside in case of emergencies is not only a good financial strategy, it will also help you sleep easier at night. No matter how careful you are, there are no guarantees that life will unfold according to plan – an illness, job loss, or an unexpected repair – mishaps can happen at any time, which is why a rainy day fund is an important part of your budgeting process. Here are some items to consider.

• How much to save

Most financial experts recommend that funding should be available to cover living expenses for three to six months.

• Emergency fund options

Your emergency fund should be easily accessible, but separate from your day-to-day operating account. You’ll also want to be sure it isn’t locked into an account that penalizes you for early withdrawal. A more fluid option like a TFSA or similar savings account will ensure the money is readily available and redeemable if needed.

• HELOC option for home owners

If you own your home, you might consider setting up a Home Equity Line of Credit for emergency use only. By utilizing credit for emergency funding rather than alternate holdings, investible assets can be redirected to longer-term investments with higher return potential.  

Commit and automate

Once you've decided on your goals, amounts, and how you plan to save and invest, be sure to automate your savings plan by setting up pre-authorized contributions. Adding an automatic transfer into your budget on a schedule that works for you (weekly, monthly or every payday, for example) is a good way to enforce positive savings habits and reduce impulse purchases.

Seek professional advice

To get the most out of your savings and find the solutions that best suit your needs, you should consider making an appointment to discuss your long-term savings needs with a professional financial advisor. With their knowledge, expertise and credentials, a professional advisor can help you determine the best plans and strategies for your specific long-term goals – and how to make adjustments to suit current and future financial trends, with rates, offers and more to help accelerate your savings. Our team at BlueShore is here for you.