Here are a few actions you can take to get a handle on your finances.
Do you want to start making better financial choices? The good news is that smart money moves may be easier than you think.
Here are 8 ways to help you progress toward a brighter future.
1. Make a budget
A budget is the starting point of any good financial plan. Don’t have one? Try our budget calculator to get an idea of your monthly expenses. Or update the one you’ve already got. Make sure it’s realistic. Don’t forget emergency expenses like car repairs and yearly expenses like property taxes or winter clothes for the family. Then stick to your budget as best you can.
2. Pay yourself first
This is one of the most important rules of personal finance. What does it mean to pay yourself first? It means putting aside an affordable amount every month before you pay bills or make any other purchases. For example, you could set up automatic withdrawals from your pay that go into a registered retirement savings plan (RRSP). That way you never see the money and aren’t tempted to spend it.
3. Build an emergency fund
The pandemic taught many Canadians about the importance of saving for a rainy day. How much should you have saved up in an emergency fund? Aim for 3-6 months of your net income. What matters most is that you start saving today. Even a small amount every paycheque can go a long way. Putting that money into a tax-free savings account (TFSA) might make withdrawals less tempting.
4. Maximize your employee benefits
This includes both retirement savings and health benefit plans. Call the company that administers these plans and ask about how to get the most out of your plan. For example, a lot of employers match the retirement plan contributions that employees make, up to a certain level. It’s free money that you don’t want to leave on the table.
Start with your short-term goals. Think about what you’d like to accomplish by the end of the decade. Choose goals that are attainable, but optimistic. Studies show optimists have a better relationship with money than pessimists.
Next, focus on your long-term priorities. Here’s where you can dream of life goals, and retirement. An advisor can help you update your financial roadmap to get you there.
7. Meet with an advisor
Or find an advisor if you don’t have one. A Sun Life advisor can help you build a personalized plan to make your life dreams a reality.
8. Rebalance your portfolio
What does that mean? If you already have investments, it’s the portion of your money invested in stocks, bonds and other assets. You’ll want to reset this asset allocation as you age and as the markets go up and down. Talk to your advisor about a plan that follows your changing needs.
This article is meant to provide general information only. Sun Life Assurance Company of Canada does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.
One of the best things you can do for your finances is to pay off all of your debt. To get started, focus on your most expensive debt—the credit cards and loans that charge you the highest interest. Once you have paid off all of these debts, focus on paying off your mortgage.
Historically, investing can be more powerful than saving up your money in a savings account. That's why we recommend investing for your big, long-term goals, like retirement, education for your kid(s), or growing your wealth (even more!).
The 50-30-20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must have or must do. The remaining half should dedicate 20% to savings, leaving 30% to be spent on things you want but don't necessarily need.
The classic approach to doubling your money is investing in a diversified portfolio of stocks and bonds, which is likely the best option for most investors. Investing to double your money can be done safely over several years, but there's a greater risk of losing most or all your money when you're impatient.
1 thumb rule of investing? Allocate 30% of your monthly salary to dividend investments for the benefit of future generations. Following that, distribute 30% equally between equity and debt components. Invest 30% of your retirement funds in debt schemes that generate income.
When you pay yourself first, you pay yourself (usually via automatic savings) before you do any other spending. In other words, you are prioritizing your long-term financial health.
Generally, experts recommend spending no more than 30% of monthly pre-tax income on housing. However, it's not always that simple. According to the U.S. Census Bureau, between 2017 and 2021, over 40% of renter households (19 million) spent more than 30% of their income on rent.
Introduction: My name is Pres. Carey Rath, I am a faithful, funny, vast, joyous, lively, brave, glamorous person who loves writing and wants to share my knowledge and understanding with you.
We notice you're using an ad blocker
Without advertising income, we can't keep making this site awesome for you.
