Pattie Lovett-Reid

Chief Financial Commentator, CTV

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There are three things in life that I know for sure don't lie: your birth certificate, the bathroom scale, and your bank account. 

The numbers are the numbers unless you decide to do something about it. However, these numbers are not carved in stone.

There is a way to manipulate all three of these data points. I'll break it down. When it comes to your age, we all have a chronological age – the age on your birth certificate. This can be different than your biological age, depending how well you have taken care of your body, and of course, genetics play a big role as well. We also have a financial age. If you started saving early on in life, you have likely built up more savings than someone your age.  This allows you to have a financial age much older than someone who hasn't started to save. 

Let's breakdown how to increase your financial age. A key to establishing good saving habits is to make saving even easier than spending. Here are some tips:

Ask your bank about linking your savings and checking accounts via an ATM card. Set up three savings accounts with goals attached to them. One may be labeled "cushion" for emergency cash, a second for "expenses" for unexpected bills, and a third for "investments." Carry your card only when you really need it to make transactions, and withdraw only what you need for one week. Then you won't be tempted to take out cash for impulse purchases.

Whenever you're paid, put only what you need to live on for one month (or two weeks, if you get paid every two weeks) into your checking account. If you put more into checking, you'll probably spend it.

If you can, put money equaling one month's expenses into your expenses account for unexpected bills. The idea is to build at least a small stash so you're less likely to use your credit card if your car needs a new tire.

Begin building your emergency cushion by depositing a portion of each paycheck into your "cushion" savings account. If your goal is to have three months’ worth of living expenses, you could reach your goal in 30 months by saving 10 per cent of each month's pay — or in 15 months by saving 20 per cent.

Put whatever is left into your "investments" account, including found money such as birthday and holiday checks, bonuses, or money made from a garage sale. If you get a raise, put the difference into this account on a regular basis.

If your bank can't link your checking and savings accounts, or if you find it hard to control your spending when access to your savings is easy, ask your employer about direct deposit. You can have money taken from your paycheck and placed in a savings account automatically.