8 Strategies to Increase Savings

Financial freedom comes fundamentally with increasing that savings rate first.  Striving for a savings rate of even 50%-70% will allow one to speed up the journey towards financial independence at an exponentially faster pace.  Increased savings can be put into a down payment on a principal residence or into a high-interest savings account.  There will also be increased time to allow saved funds to grow and amass an increasing net worth.  The power of compound interest permits investments to multiply in growth at an accelerated rate.  Compound interest refers to the interest determined from both the initial principal investment as well as any accumulated interest previously.

Dedicating as much of your income to savings usually means that an individual would have to decrease the expenditures that are in the ‘Needs’ and ‘Wants’ categories.  Straightforward cooking at home instead of eating out at restaurants, taking public transport when available, and reducing monthly unutilized subscriptions are all standard ways to budget responsibly.

In addition to standard household methods, there’s many means available more specifically to trade workers to increase income or decrease expenses in order to contribute to a higher savings rate goal.

Ways to Increase Income

• Add some overtime hours – Much of the trades construction industry is projects based. Thus, there’s lots of labour needed during the construction phase to keep within estimated timelines.  Provincial and/or Territorial employment laws usually require employers to pay at least 1.5 times the standard pay rate for overtime hours.  Generally, overtime work hours would be time that an employee is working above 8 hours a day or 40 hours in a week.  Taking on increased overtime hours will increase total pay.
• Work up at camp location – ‘Camp’ work is a very common employment opportunity for trades workers. Many of these project jobs require workers to take on a cycle rotation schedule such as 14/7.  This rotation type would mean that the trades personnel works 14 days straight, then has a 7 day rest period.  The hours of work may be extensive 10-12 hours a day, with the worksite in a remote location.  Due to the nature of these roles, ‘camp’ jobs often pay significantly more salary.
• Side income projects – With a trades background, individuals would gain work experience that gives them the ability to earn income outside of their primary employment. They could potentially perform side jobs that are consistent with the trades work that they are doing or they could use transferrable skills to supplement their income.  Apprentices could easily find side jobs assisting clients, with general tasks or errands, sourcing these clients through current technology platforms.  Any side income would directly increase the amount of gross incoming funds available.

Links to sites that can assist trade workers and apprentices outsource their services in short-term tasks:

• • Task Rabbit
  • Handy now Angi Services for Pros

• Get short-term certification – The trades have an abundant amount of short-term technical certifications that are even as short as 1-3 days (eg. Occupational First Aid, Forklift, Confined Space, etc.).  Obtaining a quick certification provides opportunity for access to additional roles that pay at a higher rate, or increased work in a different facet of your current employer.  Microcredentials are being offered at many of Canada’s post-secondary institutions, to up skill the workforce in crucial sectors.  Candidates for these microcredentials may be experienced tradespersons, apprentices finishing a block-level of technical training, or those planning for future-focused job opportunities in the skilled trades.  In the trades industry, many of these accelerated training programs can even be fully funded by various government organizations.  Trades personnel can upgrade their skillset in a specific microcredential area very quickly at low-cost, and be equipped for increased responsibilities that can provide increased renumeration.

Government-funded Canada microcredentials:

• • Quick Train Canada Education
  • StrongerBC Future Skills Grant

• Grasp new technologies – In this technologically advanced era, new technologies are being introduced to the trades industry at a significant rate. Learning to use these available innovations can make you a more valuable asset to the Company, unlocking further career opportunities.  As well, increased efficiency with the use of technology can allow more time for individuals to perform higher-level decision making tasks and roles that will lead you to earn increased remuneration.
• Update your business acumen – Graduates of trades programs have the technical ability to become self-employed very quickly. Going from Apprentice to being in charge of your own business, essentially as Chief Executive Officer (CEO), is a high learning curve.  Becoming self-employed is a tremendous amount of work, but the earnings potential can be substantially greater.  There is increased compliance and business risk when a trades person moves from an employee to starting their own business.  Thus, learning some of the financial framework of business will assist in understanding the action steps you can take to propel earnings to the next level.

Ways to Decrease Expenses

• Work at camp locations – Employment at ‘camp’ locations are usually on a work site that provides meals and lodging for the entire cycle to the employee.  Transportation costs to the site town are usually even reimbursed.  With all these benefits paid for by the employer, trades personnel can significantly decrease these primary expenses in a monthly budget.  In some of these remote towns, there may also be reduced opportunities to spend the discretionary income.
• Bring lunch / snacks to work – This sounds easier than it is, especially for those that work in larger metropolitan areas where various coffee and lunch stops are all around. Consistently bringing lunch instead of getting takeaways gets individuals into a positive financial routine.  Even reducing expenses by $10 or $15 a day can make a significant impact on the road to financial independence, as one has that much more each day to invest in future earnings.
• Using benefits package provided by employer – There are employers in the skilled trades that provide employee benefits such as extended healthcare, group life insurance, disability income protection, daycare, retirement benefits, or even alternative work arrangements.  Utilizing the benefits that are already provided by your employer allows individuals and families to not have to incur those costs personally.  With items such as dental services the benefit usually far outweighs the actual employee premium costs required to be paid.
• Take on out-of-town assignments.  Living out allowance (LOA) are usually provided for out-of-town assignments.  Trade workers usually have a reduction in personal costs, as the employer provides reimbursement or an allowance for accommodation, transportation, and meals during this period.
• Have employer fund further education credentials – Employers generally want their employees to update their skillset and take their new found capabilities to the workplace.  Trade workers can negotiate with their employer to provide for updated or renewal of work tickets, certifications, and further continuing education.  Employers can often deduct the cost of the training as a business expense.  Chapter 5 – Funding Opportunities for Apprentices discusses an array of options to obtain financial funding as a trade apprentice to complete your Certificate of Qualification including Red Seal Endorsement.

• Combine vacation with employer business trip or conference. As the transportation is already part of the business trip, combining personal vacation time can assist in reducing otherwise travel costs.
• Access Funding for Tools and Work Attire – As skilled trades workers are in high demand, many programs  are available to assist trades workers with the cost of tools.  Employers usually need to provide standard safety and protective equipment to comply with occupational work standards.
• Manageable commute – It is very unlikely for trade workers to be able to work from home or remotely.  To assist in reducing personal transportation costs, trade workers can choose to give preference for work locations that have a nearby commute or that an individual can get to utilizing transit.  Another option is to seek work projects that there is reimbursement from the employer for parking and/or an allowance for mileage.
• Do-It-Yourself Home Maintenance – Trades workers are already experts in their own trade. These hands-on skills usually translate into many maintenance repairs and renovation projects that can be do-it-yourself (DIY).  Fixing general items yourself can save a lot on costly labour expenses.  An advantage of being in the trades is that your network of general contractors and labourers is also higher.  A trade worker can even exchange their services to save funds.  An example would be that an electrician assists a neighbor for some electrical work, while the neighbour assists in moving furniture.