Many people find managing their money to be stressful. But it doesn’t have to be. Here are some tips to help with your financial wellbeing.
Track your spending
Budgets are like dental floss. Boring, and sometimes a little painful. They’re also easy to do and worth the effort.
Start with your take-home pay and subtract what you spend on basics like housing, food and other obligations. If there’s no money left, you need to cut back on expenses. Any surplus should go into savings or investments.
Be cautious with credit
Credit cards are convenient, and a useful way to build a credit rating. If you pay your full balance each month, you won’t have to pay interest in addition to the amount you’ve borrowed. But the interest rate on credit card debt is high, so make sure you don’t spend more than you can pay off when the bill is due. If you do come up a bit short, use a lower-interest line of credit to pay off the balance.
Expect the unexpected
Jobs can be lost, sometimes with little or no warning. A serious illness or injury can also put you out of work. For most of us, any one of these scenarios could mean real financial difficulty. It’s important to manage these risks with the right insurance coverage. If you can build one, an emergency fund is also valuable.
Look ahead to your retirement
We live in a country that combines the freedom to create a financial life for ourselves and our loved ones, with programs that can provide assistance. Understanding how these programs work helps ensure you’re covering what you need to with your personal savings, insurance and investments.
The Canada Pension Plan (CPP) is an example. It’s designed to provide you with a portion of your retirement income, in addition to what you can save elsewhere. If you are at least 60 and have made one or more valid contributions, you qualify for CPP benefits. CPP Investments manages the Fund in the best interests of the CPP contributors and beneficiaries. With more than $529 billion (as of September 30, 2022), the Fund is sustainable for the next 75 years.
There is real value in maintaining a long-term perspective. The more you’re able to think about money priorities over your entire adult life – as well as your immediate income and expenses at any given time – the more successful you’ll be in building real financial wellness for many years to come.
credit – newscanada