Managing and improving your financial wellness is all about replacing bad financial habits with good ones. Like changing any habit, the first step is always the most important.
Habits are regular behaviours that fine tune your borrowing to stay on top of debt over time. Like that muffin with your takeout coffee each morning, a habit becomes part of your regular routine—even if it's something you know might not be all that good for you.
Changing your financial habits is much easier if you can always try to keep sight of these four guiding principles:
Here are five good financial habits to help you stay on top of your finances and look ahead to a brighter financial future.
Creating a simple budget helps you track your weekly or monthly income and expenses—and keep sight of your big picture financial goals. A budget should include:
It's important to review your budget at least every month to track goals progress and check you aren't spending more than your earn or overspending in particular areas. The aim is to always keep your expenses within your income, while staying on track to achieve your goals.
The Government of Canada has a useful, and easy-to-use, online budget planner to help you create your first budget.
For many of us, one of the biggest barriers to saving is simply remembering to do it. The solution is to let modern online banking technology take the strain.
Automating payments from your chequing account into a savings account lets you "pay yourself first" each paycheque cycle. If it's a predetermined amount you know you can afford because you've plugged it into your budget as a regular expense, you won't even know you're doing it—until you check your savings balance and see how fast it's growing.
Here's how to set up an automated savings plan:
It's amazing how just a small amount saved each month can add up over time.
Life rarely goes exactly to plan. Be prepared to weather any storms that come your way by always having some easy-to-access cash in reserve. Money squirrelled away in an emergency fund can help you over the following bumps:
Aim to build an emergency fund that can cover at least three to six months of essential expenses. Here's how to build that fund to give you peace of mind in future:
In Canada, we're doing pretty well. According to the Government of Canada, 64% of us had some emergency savings before the COVID-19 pandemic hit in 2020. Always having an emergency fund gives you peace of mind that you and your family are covered during tough times.
While an emergency fund can help you cover your expenses for a few months if something happens, a protection plan aims to cover you and your loved ones over the longer-term. Insurance helps you to:
It's important to regularly review your insurance needs as things change in your life over time. For example:
Few things in life stay the same for long. Regularly reviewing your insurance needs makes sure you're always protected.
Do you go to the doctor for a regular check-up? Think of reviewing your plan annually with an advisor as your financial wellness check. Talking to a financial advisor can help you to:
Meetig with your advisor regularly, at least every year, can help you keep your finances in shape by:
Ready to improve your financial wellbeing? Even the smallest of first steps can eventually result in big improvements.
Contact us to discuss your financial wellness, including how to spend smarter, save more, borrow wisely, and plan for the long-term. We've got your back.
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