Saving is never easy — but here are some tips that could help

Canadians aren't saving as they once did and collectively are holding record high levels of debt.

These concerns have been on the radar for some time, consistently flagged by the Bank of Canada. The average household savings rate in Canada has dropped from about 20 per cent in the 1980s, to 5.8 per cent in the fourth quarter of 2016.

In a recent Facebook Live with personal finance expert Rubina Ahmed-Haq, CBC viewers posed questions about saving and controlling debt.

Does tracking spending in a budget help?

A big part of being able to save is stopping yourself from spending all the money you make. One Facebook Live viewer asked about the virtues of keeping a monthly budget.

Ahmed-Haq says it's not necessary for everyone — in fact, she doesn't do it herself. "Budgeting is a lot like trying to track your calories. It just gets frustrating."

To keep from going into debt, she uses a simple strategy. When it comes to her after-tax income, 10 to 15 per cent goes into savings and another percentage to her children's RESPs. Then she pays her bills — and spends the rest.

"I don't worry about the small stuff, because I have saved, paid my bills and now I can spend."

For some people, it is important to track their spending for a short while, Ahmed-Haq says, especially if they are drowning in debt or unable to save.

"But once you have figured out where the bleeding is, and you sort of pull back, then really just getting into the habit of always paying yourself first, then paying your bills, and then spending the rest, you will never be in debt."

If you're just starting out, she suggests building up an emergency savings fund first, by putting away 15 per cent of your take-home pay until it represents three months' worth of living costs.

• Canadians don't save like we used to, and for good reason
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• Canadians owe more than ever before — but they're worth more, too

How about tossing the credit cards and only using cash?

One Facebook Live viewer suggested sticking with cash can be a good way to help control spending. Passing on credit cards can be a decent strategy, Ahmed-Haq says, noting multiple studies that show cards can make people spend more.

She shared a story of how her family went to a fair recently with only $33 in cash. She refused to use the high-fee ATMs on site and says they were able to make the money stretch.

"Maybe we will get just one big ice cream to share it, rather than everyone getting one of their own," said Ahmed-Haq.

She figures they would have easily spent $100 that day, if the fair had accepted credit cards.

Is a line of credit ever the right choice?

In the comments section, Facebook Live viewer debated whether lines of credit were a good idea. As with any type of financial advice, Ahmed-Haq says it really depends on your personal situation.

A secured line of credit — which often offers a lower interest rate — can be a good thing, she says, if you use it correctly. "It is a good way to feel like, if I had a major emergency, I could tap into this. It's a bit of insurance."

But she warns a lot of people use lines of credit for things they don't need, like an overly expensive home renovation or designer clothes.

"If you have the kind of personality where it's difficult for you to control your temptation when it comes to spending, probably a line of credit is not a good idea."

How do I find time to get financially literate?

Financial literacy is the key to success when it comes to saving and it's not that complicated, says Ahmed-Haq,.

"I'm a big believer that we can all arm ourselves with our own financial knowledge," she says.

Most people know how to do research, she points out, but are spending their time focusing on things that don't have a payoff.

She was shocked by how much time her friends could spend following celebrity gossip. "When Kim Kardashian had her jewelry stolen ... in Paris, some of my friends knew so much detail about that night."

The time would be better spent learning about finances. 

"Use that skill toward your money. Even if you do 10 per cent of that, you are going to be better off than most people."

Watch the full Facebook Live on savings and debt below: