8 of the smartest things you can do for 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.

5. Review your insurance coverage

Your needs and those of your family will change over time. Talk to your advisor about the types and amount of protection you have. Don’t forget to update named beneficiaries if your situation changes, like after divorce.

6. Write down your financial priorities

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.