Hi, welcome to Redeem the Commute. I’m Ryan, your host for the Money Course.

Today is all about savings.

Why might we save? Think of a few reasons…

Here are some examples:

  • Planned future spending
  • Maintaining control
  • No need to borrow/pay interest
  • Safety net for the unexpected!
  • Bank gives you (a bit) of money
  • Guilt free shopping!

Savings also includes “Planned Spending” – The essentials that you know are coming up e.g. Christmas, Insurance, Birthdays, etc.

But it’s also important for emergencies!

A 2015 survey of Canadians found 24 per cent of respondents said they had hardly anything set aside and more than half, 56 per cent, reported having less than $10,000 in available emergency funds.

Canadians and Ontarians on average have $41,000 in emergency savings.

http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/more-than-half-of-canadians-have-less-than-10000-set-aside-for-emergencies-bmo/article26172527/

Twenty-nine per cent said their savings would only last one month or less, while one-quarter reported that they have enough to last them over a year.

The most common rule of thumb I’ve heard is that we should aim for 3 months of income in our emergency savings, in case of disability, sickness, job loss or otherwise. For contract workers, business owners and the self-employed, that rises to six months of income. It’s all about planning for the unexpected. It might not exactly give you peace of mind – a crisis is a crisis – but it’s one less thing to immediately deal with when the unexpected arises.

Question: How much do you have in emergency savings, or savings at all? How many months of your income could it replace?


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