If you wanted to DIY your personal finances, where would you begin?
To reach our financial goals and maintain a healthy financial life, we should all have a solid financial plan to get us there. Yet many in Halifax worry they can’t accomplish this on their own. We’re so used to having to pay for financial advice and leaving the decision-making to the professionals.
Now, however, there are a lot of excellent online personal finance resources available, so this old way of thinking is no longer true. It’s entirely possible to gain control of your finances yourself and there is zero need to pay fees for external help.
Even better, this approach is completely customizable. You get to create your own goals, select your own investments and go at a pace you feel comfortable with; it’s the ultimate in personalization. You’ll also feel a huge sense of accomplishment in designing your own financial roadmap.
How financial literacy affects personal finance
Without solid financial literacy it’s difficult to make smart decisions about money. You need to understand how finances work so you can make better money decisions across the board, 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 offers a fantastic online financial literacy course and it’s free. It takes a few hours to complete, is open to everyone and is taught by professors from the school’s Desautels Faculty of Management. After you finish all of the modules in the course, you’ll receive a McGill Personal Finance Essentials attestation of completion.
Another great tool for learning how to manage your money is the Government of Canada website, which Wood highly recommends. It covers all of the essentials: budget making, banking, credit reports and credit scores, insurance, retirement and estate planning.
Canada’s largest personal loan comparison website, LoansCanada.ca, can also help you make smart financial decisions. The site gathers quotes from different lenders and can choose the best one for you, saving you time.
The steps to better financial health
Start by learning how to create a budget. Budgeting lets you track and control spending because you’ll see exactly where your money is going. With a budget in place, you can create an emergency fund, which the COVID-19 crisis has taught us is a necessity for all.
Check out Mint, a free online budget tracker and planner. Another excellent resource is YNAB (You Need A Budget), personal budgeting software based on The Four Rules principle. Both can help you make smart financial decisions and take control of your money.
Next up? Investing. It allows you to grow your wealth and helps you reach your financial goals. If you have long-term goals such as retirement or saving for your child’s education, investing is how you will succeed.
Make sure you have a tax-free savings account (TFSA), which you can open either online or in-person at your local bank. You might also want to try using a robo advisor. Online investment management services like Wealthsimple or WealthBar are both easy to use.
Finally, focus on debt management. It’s important to begin paying down your debts and only taking on new debt you can handle. Remember, good debt can actually increase your credit score.
If at any point you need help, contact a credit counsellor. They can help you with basic budgeting, credit health, credit improvement and creating debt repayment plans. Should you need a more drastic solution such as debt consolidation, debt relief, consumer proposal or bankruptcy, they can also advise you.
Take control of your finances now and start building your future. Use the resources listed above and if ever you need assistance, reach out.