It’s November already. It’s crazy to think 2020 is almost a wrap. Before we know it, the holidays, the new year, and 2021 will be here. November is a much more exciting month than you might think! November is financial literacy month, and it’s a great time to check in on your finances and build a plan for the future.
What is financial literacy?
This part tends to confuse because it’s not black and white. Financial literacy is a scale of how well you understand the ins and outs of finance. This definition is different from person to person, but there is always some opportunity for improvement!
By improving your financial literacy, you improve your ability to understand and effectively use this knowledge to improve your financial future. Financial literacy topics include budgeting, financial planning, investing, and saving for a rainy day. The more you understand financial literacy, the more you can get involved in the conversation and ask the right questions when dealing with your financial matters!
Why is financial literacy important?
Imagine, for a moment, that you are a professional hockey player. Would you expect to compete at the highest level if you didn’t understand the rules of the sport? Would you believe you could win if you didn’t know your opponent, the plays, and the gear?
Financial literacy is like training for a sport, hobby, or activity. It may not be as exciting as a professional sports game, but it provides you with the tools you need to navigate the financial world successfully. Creating a budget can prevent you from paying additional interest fees, and choosing the right investments means you can build your financial future.
When you understand the game, the rules, and the objectives, you make better financial decisions and improve your knowledge. You will work with financial professionals, like mortgage brokers, because you know they have your best interests in mind and can answer the questions you have. As you go down your financial journey, improving your financial literacy is the number 1 way to improve your financial outcome. You will understand your own needs better and learn to ask the right questions when you don’t exactly know the answer.
What questions should I be asking?
The right question depends on where you’re starting and where you’re looking to go. Financial literacy is a journey measured in inches, not miles. Much like an investment, knowledge compounds over time.
We cannot answer for you, but if you’re not sure of the answer to any of these questions, that’s probably a great place to start!
- Do I understand my cash flow monthly?
- What can I afford to save each month?
- How much am I paying on interest each month?
- What are my available RRSP and TFSA contribution room?
- What is my net worth? Is it increasing or decreasing?
- What are my financial goals this year? How about the next five years?
- Who can help me reach these goals?
Where should I start?
Most people should start by building a budget. By keeping an eye on your income and expenses, you will spot things you might be wasting money on and find you’re able to invest more than you thought you could.
Once you have a budget in place, you will find the answers to where to go next. You may want to check out topics on debt repayment. Perhaps you want to learn more about investing or find out more information about rental properties. The most important thing is to start where you are and to start today. The Clinton Wilkins Mortgage Team, a top mortgage broker in Halifax, will be putting together resources throughout November on their blog; you can read more on their website. You can also find out more information on the Government of Canada website here.
How can a mortgage broker help?
For most people, buying a home is the most significant expense they will have in their lifetime. Small details in your interest rate or terms can have a substantial impact over a lifetime. By working with an unbiased mortgage professional, you will gain a trusted partner in your journey to homeownership. An unbiased mortgage broker will help answer any questions you may have and help make sure you understand your options.
If you’re not in the position to buy a home, an unbiased mortgage professional will help you build a plan so that you can buy one in the future. It’s always a good idea to have a trusted partner when planning your financial future!
For additional information, contact Clinton Wilkins Mortgage Team or call 902-482-2770.