So, you’d say you’re pretty good with your money. Your work automatically deposits part of your pay cheque into a pension fund, so why would you worry about savings? While there may be no need to worry, we do think that making some small, intentional changes with your finances could really maximize your money’s potential. Sound interesting? Or maybe intimidating?
Trust us—it’s nothing too crazy and it will make a huge difference. Here are five steps you can take to start now, so you can be well on your way to financial wellness.
Evaluate your money relationship
It’s amazing how much your relationship with money will affect how you spend, save, and feel about your finances. Take some time to reflect on any emotions that come up for you related to money, any spending habits you’ve noticed, anxieties you have around saving, anything. Understanding these behaviours and the “why” behind the “what” is the first step to building a healthy view of finances.
We know you’ve heard this all before, but keeping a basic budget really does make a huge impact! Maybe you feel like having a budget is limiting, but we suggest a different perspective. Knowing how much you can spend can free you to direct your extra money towards things you care about, on top of covering the essentials. Even if it’s only $20 towards that dream vacation, that’s a start.
To make sure you’re getting the most out of the money you’re putting away, make sure you’re putting it in the right place! In general, if you’re looking more long-term to save for retirement, than an RRSP is the way to go, and a TFSA is great for a shorter term plan strategy, since you won’t get taxed for withdrawing funds.
This means putting money in a savings or investment account regularly—like you’d pay your rent or mortgage. You can set that up to automatically come out of your paycheque to make saving a no-brainer. We’d also challenge you to take a hard look at your budget, and see where you can afford to cut expenses (even small ones) now to set yourself up for later.
All this can get pretty overwhelming when it all builds up—have you ever tried working through last month's’ budget when you’re already halfway through this month? Not fun. Get in the habit of paying attention by using your online banking, or any of the mobile apps from Google Play or the App Store.