The good news is making smart money moves is easier than you may think. Here are 13 ways (some quick, others need more planning) to help set yourself up for a brighter financial 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.
Read more: 10 tips for eating healthy on a budget
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? 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.
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5. 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.
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6. Prepare your will
Or update the will you already have in place. Thinking about your will might not sound like anyone’s idea of fun. But you’ll sleep better knowing your wishes are clear.
7. Read or watch as much as you can about finances
Financial literacy is the gift that keeps on giving. Becoming familiar with financial terms and concepts may help you be more mindful of your money. You can start small by subscribing to Sun Life’s Brighter Life newsletter. You’ll get money and health advice in your inbox every month.
Want to increase your financial literacy?
Get started with our Simply Put video series.
It’s all about explaining insurance, savings and investment terms – simply.
9. Write down 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.
10. Calculate your net worth
To do this, just add up your assets (what you own) and your debts (what you owe). Then subtract your debts from your assets. It can be an eye-opening experience.
11. Check your credit score
You can access your credit score through your bank or through a credit bureau. It’s free and doesn’t take more than a few minutes. Why take a peek at your credit score once a year? A good credit score may make the difference when applying for a new job, getting an apartment or a new mortgage.
12. Talk about finances with your partner
This is especially important if one of you usually takes the lead on the family finances. It pays to have a good sense of what your financial situation is. And especially important when you or your spouse dies.
Read more: How to budget as a couple
Need help figuring out what's right for you?
An advisor can help put together a solid plan that suits your goals