Editor’s Note: This article was originally written by FT back in 2017. Due to its popularity, we have asked FT to update it for 2021 with more relevant advice. As always, we encourage you to comment below and tell us how you save money in your day to day life.

Out of all the strategies that I have used to build wealth over the years, I would say that saving (and investing those savings) contributed the most in my million dollar journey.

While there are a lot of savings tips and tricks out there, you’ll get the most bang for your buck if you focus first on your largest budget items. For most households, the top 3 expenses include: housing, groceries/food, and vehicles.

Here are some of the savings strategies that include savings tips for the top 3 expenses, along with other savings tips that I’ve used along the way.

Included below are 25 ways that I save money:

1. Bank your Raises –  One of the pound for pound most effective ways to save money is to live simply for as long as possible.  When my income increases, I aim to keep lifestyle inflation at bay. Basically, I bank my raises.

For us, we started off buying a 2-apt house to live in one unit and renting out the other. We decided to build a slightly larger place when we were expecting our first child (in 2008), and even though our financial situation has significantly improved since then, we still live in the same house.

2. Reduce your MER – If you have mutual funds, did you know that reducing your MER by 1.5% could result in a 50% larger portfolio after 30 years? I keep our ETF/mutual fund management expense ratios (MER) as low as possible by using indexed ETFs/mutual funds. And that’s assuming that your mutual funds can keep up with indexed ETFs! Check out some all-in-one index ETFs here.

3. Shop for the Best Rates – When making a big purchase that requires a loan, like a mortgage or a car loan, I negotiate and shop around for the best rate. When your mortgage term is up, take some time to shop around instead of just renewing with your current provider. This will save you thousands in the long run.

4. Buying a Home – In addition to shopping for the best mortgage rates, and buying a home that’s affordable, saving for a large down payment can significantly reduce CMHC fees. You can also read Kyle’s article where he discusses if it’s worth it to buy a house in Canada or not.

5. Reduce your financial fees –  I arrange my banking so that I don’t pay any fees and use a discount brokerage that minimizes my trading expenses.  The current highest rated discount brokerage with Million Dollar Journey is Qtrade – check out our review here.

6. Buy Gently Used (especially cars) –  Buying gently used big ticket items can offer a lot of savings. This works especially well with highly depreciating assets like cars! From my research, for cars, the sweet spot is 3-4 years where they can depreciate as much as 50% (depending on the make/model). We did this with our last vehicle purchase (way back in 2016) where we purchased a $46,000 3-year old large Japanese SUV for $25,000. 

7. Maximize those Loyalty Programs – Use points or a cash back based credit card that gives me the best return for my spending. Over the last few years, I’ve been maximizing the PC points system that can be the best points system in Canada if you use it right.  

8. Reduce Temptation – When buying consumer items, I try to separate my “needs” and my “wants”. Before you put the item in the shopping cart that’s not not on the list, ask yourself, “Do I need this?”

9. Get Cashback When Shopping Online – When I find something that I “need”, I do comparison shopping or wait until it goes on sale. If I find the item online, I check Rakuten or Great Canadian Rebates or for additional cashback opportunities.

10. Entertainment – We use streaming services to watch movies at home instead of going to the movie theatre every weekend (pre-covid). However, since we enjoy the theatre, we still visit the movies on occasion. Here is how to maximize Scene points. To please our reading habit, we use the library as much as possible. 

11. Drive Efficiently – When purchasing vehicles, I tend to think about function over form. Fuel efficient SUV’s work for our family.  Even if a car is fuel efficient, we drive with gas efficiency in mind.

12. Save Energy at Home – We save energy around the house with CFL’s, programmable thermostats and proper insulation. A few years ago, we took it to the next level by installing a mini-split heat pump and it has made a dramatic difference to our overall energy usage.

13. Do Housework in Batches – We do laundry once / week (we may do more now because of the kids, but try to be as efficient as possible) and we wait until the dishwasher is full before turning it on.

14. Save at the Office – While a number of employees go out to lunch, I try to brown bag my lunch as much as possible. This can save up to $300/month (assuming $15/lunch). To make brown bagging easier, I prepare my lunches in bulk and store them in individual glass containers.

15. Cook at Home – I will admit that we really enjoy trying new food establishments, especially places that specialize in a particular dish (ramen anyone?). Having said that, we prefer to cook at home for a couple of reasons. First, it’s likely healthier and second, you can save a lot vs eating at a restaurant. So we tend to cook at home as much as possible.

16. Save on Coffee/Tea – I really enjoy my morning coffee and while it would be easy to pick up a coffee at Starbucks or McDonalds, I make my own coffee because first, it tastes better, and second it saves me a bit of time and money. A $3 daily coffee would cost me about $90/month, while making it at home works out to be less than $1/day (even with my latest pour over coffee obsession). 

17. Reduce your Sins – The government takes full advantage of cigarettes, alcohol, cannabis by taxing them through the roof (sin taxes). For me, as more of a healthy lifestyle choice, we avoid sin taxes as much as possible. That’s not to say that I don’t have a social drink or two when with friends.

18. Save Money on TV/Internet/Telephone – We tend to keep it simple and have basic cable instead of the fancy cable packages. We also look for bundle deals in cable/internet/telephone with the same provider to take advantage of the discounts available.  

19. Buy term insurance and invest the rest – The Wealthy Barber put it best, buy term and invest the rest. For most of you, term insurance makes more sense than universal life or whole life insurance. The premiums are much lower and with the goal of financial independence for a lot of you, have the goal of being “self-insured” before the term expires.

20. Save More on Insurance – When you need new insurance, shop around for the best deals on insurance products.  In addition, look at increasing your deductible on insurance products to reduce the premiums.

21. Save Money on Travel – With all the comparison travel websites/apps out there now, getting the best deal now takes less time than ever. To save money on car rentals, I watch the fluctuating prices on Expedia and when a low price shows up, I bid slightly lower on Priceline. Another way to save is by getting a travel credit card or an Aeroplan card.

22. Buy Quality – For large purchases, buy with quality in mind in the expectation that it will last a long time. Stick with the brand names that have a reputation for reliability, longevity, and reasonable repair costs – but wait until they go on sale! We have found that the extra premium on these products often pays for itself over the long term.

23. Make Saving Automatic – I make my deposits into my high interest rate savings account and RRSP automatically on a bi-weekly basis. Basically when I get my paycheck.

24. Track your Spending – I track my spending/budget with Excel or other finance apps. As mentioned above, knowing your largest expenses and attacking those first is the most efficient way to increase your cashflow.\

25. Sign up to personal finance newsletters and forums – One of the best ways to pick up new ideas is by engaging with the community. I can’t begin to tell you how many little tricks I learnt from my readers over the years! Hopefully this update will spur more comments from people sharing their saving secrets with us. You also can subscribe to the Million Dollar Journey newsletter and get our 2 free eBooks here.

What are some ways that you save money? Do you follow the frugal living lifestyle?

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FT

FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.
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Jean
2 months ago

And yes, I’m healthy in early 60’s.

Jean
2 months ago

I’m certain car driving lovers don’t want to hear this: However, if you don’t have children or they’re independent, then go cycling as your commuting and fitness vehicle. I gave up my license over 35 yrs. ago. So take transit, walk…and last 30 years bike in all non-snowy seasons. I bike up to early Dec. Choose to live within 15 min. walk of services, some shops and park, transit stop. This has been a conscious decision each city where I’ve lived. I’ve taken 4 fitness classes in these past few decades. Rest of time is free…on my bike which gets me around. Sure, it’ll be taxis when am less mobile…but that is the point of living close by to stuff so that ride isn’t super distance. In any big city, this is possible. I’ve calculated by being car-free, is redirecting $300,00 to other things for past few decades.

James R
3 months ago

I am totally into everything on this list – with one exception. The travel item – and it’s from my personal experience from having had the naivety to travel the week of March 13th – 20th 2020!!

My wife and I got on a flight to Dominican Republic just as Covid was really starting to ramp up. Our plane was full of people – and perhaps some nervousness as well.

It’s a really long story, but we ended up having a mostly good vacation, and a safe, on-time trip home.

For this trip we took the unusual step of using a full service local travel agent. In the past I’ve booked trips to winter destinations on itravel2000, on expedia, and other discount sites. I was so thankful to have an actual travel agent who had my back while I was on my trip – fearful of the possibility I might not get home. She was readily available, was constantly in touch with my air carrier and assured me at least once a day that we could enjoy the rest of our trip and we’d safely get home. She also said at any time she could pull us home early (we did pay for the highest possible travel insurance).

I will book every future trip with an agent, this agent if possible, because the level of comfort and service I got was well worth the premium I paid.

Everything else on your list – I’m all over it!

David
2 years ago

for colder Canadian climates: we use firewood as much as possible, insulated the flip out of your house, have your family on board (learning and helping out) and teach them what we are all sharing, affordable vehicles, learn how to fix your assets, learn how to build, don’t be afraid to try things and take the small loss if it doesn’t work out, discipline goes a long way (learn to say no to yourself and family), to stay far away from Credit cards or pay off when due or a day prior, check out Manulife products as well as others, self -educate (loads of books out there) &/ or go to some type of business management school, find something you really love to do that is a type of service/ product and start a small business ( we do this constantly ie, roast coffee on our BBQ, make hand man winter wreaths, prune trees … = tax deductions and added income) keep expenses low with profits high. gardening can be fun and offer exercise (at least get a few fruit trees and learn about xeriscaping. get away from a huge costly lawn if you don’t need/ want it. this will save you time and energy for years and offer you fresh organic foods), we are low income earners so for those who are * learn about how you can take advantage of Kids sport, RESP, CLB. my chink now is learning about investment incomes. I’ve always been a skilled labourer and fugal as we like to say but time is not on my side so much anymore so .. its time to start looking towards the future = compound investments (need to learn more about this one ! ) We try to have an eye on the future but not too much or you’ll miss what’s going on today and now.

Daniel
3 years ago

Just going through this with my 17 year old son in Ontario. Free tuition is for household income of under $50K which for most areas would be almost poverty level income. Plus that covers tuition only so the extra $10K per year has to come from somewhere (if the program they take is not available locally). For us, we are a two income family making reasonable incomes so we are above the $50K threshold. We do qualify for a $2000 grant through OSAP and most of the schools offer merit based scholarships of $2 – 3K per year assuming they keep their grades above 80%. My son has an 84% average so he is getting the $2K scholarship level. https://alpari.com/en/analytics/currency/converter/USD-TRY/?sum=1

Brett
4 years ago

Reading the comments on this page has actually convinced me to stop worrying about saving every penny and just enjoy my life. Entering contests for 30 minutes a day, using a metal detector to look for dropped change??? I stumbled upon this page because I was looking for ways to save money with the news that I have twins on the way. But after reading these comments, I’m convinced that there is much more important things than saving a few bucks here and there. I would much rather spend an extra couple hours with my kids each day, and accept that it is just going to cost an extra $100-$200 a month. If I have to work an extra year before I am able to retire, then so be it. I guarantee my kids and wife will appreciate it in the long run.

Financial Canadian
5 years ago

Of all the things you’ve outlined here, I think that by far the rule that I see broken the most is the concept of “banking your raises”. I work in finance and it’s very typical for new hires to have dramatic lifestyle increases upon being hired, regardless if they have boatloads of student debt or whatever their situation may be. Often it’s not the most prudent choice.

FC

Andy
5 years ago

Good tips. simple and to the point. For cable, it’s possible to replace it with a TV antenna for free HD channels and Netflix.

James
6 years ago

One great thing we did to save money was use a company that helped us cut our costs for cell phones, internet, cable TV and landlines. They kept our services exactly as is with and with the same provider. They just got us better pricing. It was the ultimate win-win. If you are looking to save some money check them out at http://www.savecell.ca.

SLN
6 years ago

I offset any expense with TFSA returns. A $50 phone expense is paid with after-tax income. Make use of the TFSA and use any tax-free returns or profits to off-set some of your expenses.