After c hecking out Gail Vaz-Oxlade’s blog Making Money Make Sense I stumbled upon a blog post called Wants vs Needs. You may know her from Till Debt Do Us Part. Simply put and blunt, Gail explained that we all believe that everything we buy is a need, but in fact most often these purchases are wants. So I did a bit of challenge myself to see what kind of purchases I was making. Were they all needs? or were most of them frilly purchases that I could do without aka wants.

What you should do: Write your own list of your week, 2-week (however long you want) expenditures. Figure out if they are wants vs needs. Look over them again and make sure your needs really are needs and not in fact wants. Then evaluate how you are spending your money. Could you have made lunch more that week instead of buying food out? It’s definitely a great way to really think about how you are spending your money. You can be pretty surprised how all the little things add up.

Here’s a breakdown of my spending for a week (don’t judge me on any of this)

Thursday

WANT-Bulk Barn-$1.56
NEED-Metro-$3.00-Used Checkout 51 to get $2 off that Cereal..btw
NEED-TTC Fare-$3.00

Friday

NEED-Bought some TTC Tokens-7 tokens for $18.55
WANT-LCBO-$18 Bought myself some Shock Top Beer & a bottle of wine for my mom

Saturday

WANT-Went to Il Bun Ji-$23 for 5 beers, Bibimbap, mussels, popcorn and fruits (I’ll be writing a review about this awesome place soon btw!)
WANT-Smoke’s Poutine-$7 (I was super lame and bought traditional…who does that?)

Monday

NEED-Bought TTC Tokens-$18.55 (All those weekend outings cost me some additional coin)

Tuesday

WANT-Bulk Barn-$1.80

Wednesday

NEED-Bought throat lozenges since I’ve been battling a cold for 3 weeks. $4.50

Thursday

WANT-Went out for lunch at work-$11 (I could have eaten my packed lunch)

Conclusions

WANTS- 6 purchases

NEEDS-5 purchases

Basically you may be wondering, how are you even alive, aren’t you buying food? My life is a bit less studenty right now since I have been living with my parents, who I love to death. They have been letting me live rent free and feeding me since January so they have helped me reduce a lot of my costs. Additionally, I’m pretty happy with my almost 50/50 split on wants vs needs, and felt like I was really fair when I determined a want vs need. For the most part, transportation has been my most common need lately, but I have been fortunate enough to get rides to work with my cousin since January, I just take the TTC home. I also managed to take the TTC all the way home from Christie and Bloor on Saturday, saving myself a ton of money in cab fare (would have cost me a good $25 dollars 1 way probably).

Also I’m wondering where my extra TTC tokens went…pretty sure my wallet eats tokens.

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I know its been long overdue that I get away from the flashy stuff and start heading down the path of bank accounts, savings and the things we all don’t want to talk about. But unfortunately it’s happening and I’ve decided to start with some saving basics. One of the first steps to increase your net worth and prevent debt is to open up a savings account (don’t quote me on this, but it’s definitely a great first step). Most students, I hope, have a savings account but I’m going to assume most don’t, or don’t use it properly. Within this post I will cover just your standard savings account…don’t want to scare you off now.

Regular/Standard Savings Account

A savings account is something in addition to a preexisting chequing account that you already hold at your bank. It’s somewhere to put money that won’t be used on a day-to-day basis and allows you to earn a small amount of interest without having to invest yourself.

What you should look for in a savings account

Choose a savings account with the highest interest rate possible without service charges (us students don’t have money to just give away)
Some banks have been offering limited time “high” interest rates from about 1.5-2% on new deposits, check it out or inquire at your local branch
Check out online banks like ING, Ally and PC Financial that have a focus on savings accounts with relatively higher interest rates than major banks

Interest?!?

Yeah the word might sound scary, and even sound like your getting charged for something instead of earning it. In fact interest in a savings account is a good thing, not like those annoying charges on your credit card statement. Usually on a monthly basis interest is given as a percentage of the total value of your savings account, some banks might take the average monthly amount in your savings account instead.

Once you start seeing your interest deposits every month you will being to realize how low interest rates are these days. Huge interest values per month like $1, $2 and maybe one month it might even just reach $7. It’s definitely something to keep in perspective when it comes to how easily we pay for things that cost $10-$20 on a daily basis…see how long it takes to make that money back in interest! Might make you want to spend a little less on those McDonald’s burgers every week..

Final Thoughts

One of the issues that students may have is actually using their savings account as a chequing account. What I mean by this is a large portion of your savings account shouldn’t be touched on a frequent basis. It’s a place where monthly rent is pulled or that semester’s tuition comes from, but it shouldn’t be an account where daily withdrawals are made from in order to fund your night out downtown or your most recent clothing purchase.

It’s important to control your own bank account and be aware of the different products available at your bank AND what they can do for you. Having a savings account amazingly enough can help you save your money better, simply because it is also money that you don’t have easy instant access to

For more information check out this Government of Canada page on savings accounts. But seriously…my blog post is way more interest anyways.

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