While some financial advisors recommend the 50-30-20 rule, where 50% of your pay goes to fixed expenses, 30% to discretionary and 20% to savings, putting aside just 10% of your take-home pay for savings is OK, too. “We can be as efficient with that 10% as we can possibly be… meaning we could put your savings in a diversified portfolio where the expected returns are going to be higher and over a longer period of time.”
Ayana Forward, a financial advisor and founder of Retirement in View in Ottawa, acknowledges how hard it can be for single women—and all women—to create a plan to invest, particularly early in their careers. “You have all kinds of competing priorities,” she says, including possible childcare expenses, a mortgage, car payments and school debts. However, Forward encourages women to begin saving anything they can as soon as possible to build habits and benefit from compound interest, which is when your money’s interest starts earning interest of its own.
Here’s how that can look: Let’s say you take $100 a week from your miscellaneous allotment and invest it at an interest rate of 5% and watch it grow. After 30 years, if you had put that $100 in a savings account with no or a low interest rate, you’d only have $156,100—but because you invested it, you’d have $345,914. (Calculate your savings with our compound interest calculator.)
Prioritize what you love
What are your absolute must-haves in life? Your non-negotiables? You don’t have to give those up—you may just have to find an alternative way to make them work while meeting your savings goals. “My client, who is a college instructor, loves to travel, and her trips are usually tax deductible,” says Hughes. But to be able to afford her trips while continuing to save, she picked up a part-time job. “It gave her some extra income since she was determined to meet her goal, which was to own a place of her own,” says Hughes.
Whether you pick up a side hustle or not, chances are there will still be a few sacrifices you’ll need to make. It comes down to looking at your budget and deciding what you want to prioritize in the immediate time period, says Cornelissen, and deciding what you can let go of for a while.
Or it can relieve you from doing the opposite, over-saving for fear of not having enough money. Knowing how much money is going in and going out of your account is key to making a plan for your money.
Revisit your employee contract
If you’re employed full-time, find out if your company offers a pension or an employer-sponsored plan, such as RRSP matching (where an employer contributes the same amount as an employee to a registered retirement savings plan). This will help you determine how much you need to save for retirement. “If you don’t have a pension, you’ll need to save more than someone who has a pension,” says Forward.
Also, when planning for your retirement explore government income sources that may be available, like 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’ll be receiving from those programs,” says Forward. (You can log into your My Service Canada account using a unique password or use your bank account log in.)
