Although some financial advisors recommend the 50-30-20 rule, where 50% of your income goes to fixed expenses, 30% to discretionary and 20% to savings, set aside 10% of your take-home pay at home to save is fine, too. “We can be as efficient with that 10% as we can be… which means we can put your savings into a diversified portfolio where the expected returns will be higher and over the long term.”
Ayana Forward, financial advisor and founder of Retirement in View in Ottawa, agrees how difficult it can be for single women—and all women—to create an investment plan, especially early in their careers. “You have all kinds of competing priorities, including childcare costs, mortgage payments, car payments and school loans,” she says. However, Forward encourages women to start saving whatever they can as soon as possible to build habits and benefit from compound interest, which is when the interest on your money starts earning interest on its own.
Here's what that might look like: Let's say you take $100 a week from your mixed share and invest it at 5% interest and watch it grow. After 30 years, if you had put that $100 in a no-interest or low-interest savings account, you would only have $156,100—but because you invested it, you would have $345,914. (Calculate your savings with our compound interest calculator.)
Prioritize what you love
What are the things you must have in life? Your non-negotiables? You don't have to give it up—you just might have to find another way to make them work while meeting your savings goals. “My client, who is a college teacher, loves to travel, and her travel is often tax-deductible,” Hughes said. But in order to pay for his trip while continuing to save, he got a part-time job. “It gave him more money as he was determined to meet his goal, which was to have his own place,” said Hughes.
Whether you get a side hustle or not, chances are there will still be a few sacrifices you'll have to make. It comes down to looking at your budget and deciding what you want to prioritize in the immediate term, says Cornelissen, and deciding what you can put off for a while.
Or it can free you from doing the opposite, oversaving for fear of not having enough money. Knowing how much money is coming in and out of your account is important to making a financial plan.
Revisit your employee contract
If you are employed full-time, find out if your company offers a pension or an employer-sponsored plan, such as RRSP matching (where the employer contributes the same amount as the employee to a registered retirement savings plan). This will help you determine how much money you need to save for retirement. “If you don't have a pension, you have to save more than someone who receives a pension,” said Forward.
Also, when planning for your retirement check out the sources of government income that may be available, such as the Canada Pension Plan (CPP) and Old Age Security (OAS). “You can go into your My Service Canada account to get those benefit statements so you know what you're going to get for those plans,” said Forward. (You can log into your My Service Canada account using a unique password or use your bank account login.)
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