{"id":18706,"date":"2014-10-13T08:00:49","date_gmt":"2014-10-13T12:00:49","guid":{"rendered":"http:\/\/canadianbudgetbinder.com\/?p=18706"},"modified":"2025-01-30T07:03:10","modified_gmt":"2025-01-30T07:03:10","slug":"saving-for-retirement-lower-income","status":"publish","type":"post","link":"https:\/\/digitalskyweb.co\/canadianbudgetbinder.com\/2014\/10\/13\/saving-for-retirement-lower-income\/","title":{"rendered":"Saving for retirement on a lower-income"},"content":{"rendered":"

EVERY DOLLAR COUNTS<\/span><\/strong><\/h2>\n

Let\u2019s face it, saving for retirement is tough work. I mean, the concept is not difficult for us to wrap our heads around but finding the money, putting it away consistently and not spending it is challenging stuff.<\/em><\/p>\n

I suspect this is the case because money is an emotional subject and it\u2019s easy to become attached to it; we work hard for it and want to reward ourselves with it. Saving for retirement takes discipline.<\/p>\n

When you\u2019re not relying on paycheque to paycheque for living expenses, saving some money should be easy enough.<\/p>\n

You also have options on where to put your money for retirement, into Registered Retirement Savings Plans (RRSPs), real estate properties, Tax-Free Savings Accounts <\/a>(TFSAs), non-registered brokerage accounts and more.<\/p>\n

High-income earners are often advised to contribute to their RRSPs in their highest-income earning years, and rightly so. This RRSP account is optimized when you contribute money when your income taxes are the highest, so monies can be withdrawn in the future when you\u2019re in the lowest (or lower) income tax bracket, presumably in retirement. Low-income earners probably shouldn\u2019t follow this advice, and they probably need different financial advice altogether.<\/p>\n

Today\u2019s post will take a look at a few money-management strategies that can apply to lower-income earners. Let\u2019s get into it.<\/p>\n

Strategy # 1 \u2013 Kill debt<\/span><\/h2>\n

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About the only thing you can acquire without money is debt.<\/em><\/p>\n

I\u2019ve also read some other interesting quotes about debt \u2013 there are three kinds of people:<\/p>\n

the have\u2019s, the have-not\u2019s, and those that have not paid for what they have\u2019s.<\/em><\/p>\n

From my personal experiences interacting with other savers and investors, I don\u2019t know many wealthy people who have lots of debt. The reality is, wealthy people have far more assets than debt, if any debt at all. Few people become wealthy owing other people money for long-periods of time – this is just a fact folks.<\/p>\n

Regardless of your income, my suggestion is to have a severe aversion to debt. The sooner you can kill debt, the sooner you can likely save for retirement. On a lower-income, forget RRSPs or even TFSAs for now.<\/p>\n

My suggestion would be to focus on paying back other people as your priority. After that is done, you should have some money available to pay your future self if you want.<\/p>\n

Strategy # 2 \u2013Forget home moaner-ship for now<\/span><\/h2>\n

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Forget owning a home<\/em>. There, I said it.<\/p>\n

Contrary to what many banks want you to believe, owning a home is damn expensive and you need to be richer than you think to afford one. Let\u2019s take a look at some typical, additional expenses that come with home ownership above renting costs:<\/p>\n