Are you ready to DIY your personal finances?
To maintain a healthy financial life and reach our financial goals, we need a solid financial plan in place. Many Kitchener residents worry, though, that this isn’t something we can achieve on our own; we think we need to pay for financial advice and leave the decision-making to the professionals.
There’s now an abundance of online personal finance resources available, so this way of thinking is no longer true. It’s absolutely possible these days to gain control of your finances yourself, with no need to pay any fees for outside help.
The best part of this approach is that it is completely customizable. You can create your own goals, choose your own investments and go at a pace you feel comfortable with, resulting in 100 per cent personalization. Imagine the sense of accomplishment that comes with designing your own financial roadmap.
Financial literacy the basis of personal finance
Financial literacy is required in order to make well-informed decisions. Once you understand how money works you can make better financial decisions in all three areas of personal finance: saving, spending and borrowing.
“There are countless free online resources available to Canadians looking to improve their personal finances,” explains Caitlin Wood, Chief Content Officer for Loans Canada and Rate Genie. “Consumers should check out the Government of Canada’s website as it covers many money and finance topics. With both Loans Canada and Rate Genie, we are always publishing content to empower Canadians to improve their financial knowledge.”
McGill University has a great online financial literacy course that is available for free and open to everyone. It takes a few hours to complete and is taught by professors from the school’s Desautels Faculty of Management. Once you’ve finished all of the course modules, you’ll receive a McGill Personal Finance Essentials attestation of completion.
As Wood recommends, another great tool for learning how to manage your money is the Government of Canada website. Here you’ll find information on budget-making, banking, credit reports and credit scores, insurance, retirement and estate planning.
Another site that can help you make good financial decisions is LoansCanada.ca, Canada’s largest personal loan comparison website. It gathers quotes from different lenders and can choose the best one for you, saving you time.
Steps to achieve better financial health
Start by learning how to create a budget. This is essential if you want to be able to reach your financial goals because budgeting lets you track and control your spending; it shows you where your money is going. Once you have a budget you can build an emergency fund, something we’ve all learned from the COVID-19 crisis is a necessity.
Some great resources can help. Check out Mint, a free online budget tracker and planner, or YNAB (You Need A Budget), personal budgeting software based on The Four Rules principle. Both will help you make smart financial decisions and gain control of your money.
Investing is the next step. It’s a key component of financial planning, allowing you to grow your wealth and reach your financial goals—especially the big, long-term ones such as saving for your child’s education or retirement.
Everyone should have a tax-free savings account (TFSA), which is an excellent savings vehicle for Canadians. You can set one up either online or in-person at your local bank. If you’re comfortable with online banking, you might also want to try using a robo advisor; online investment management services like Wealthsimple or WealthBar are easy to use.
Finally, get proactive about debt management. Begin paying down your debts and only take on new debt you can handle. Remember good debt can actually increase your credit score.
You can always seek the services of a credit counsellor. They can assist with basic budgeting, credit health, credit improvement and creating debt repayment plans. If you need to pursue a more drastic solution such as debt consolidation, debt relief, consumer proposal or bankruptcy, they can help.
Effectively managing your financial future can seem overwhelming, but it doesn’t have to. Start with the resources listed above and ask for advice, if needed.