Can you really DIY your personal finances?
We all want to have a financial plan in place. We want to maintain a healthy financial life and be able to reach our financial goals. But many in Coaldale think this isn’t achievable on our own; we need to pay for financial advice and leave the decision-making to the professionals.
Thanks to the many online personal finance resources now available, that’s no longer true. These days it’s entirely possible to gain control of your finances all on your own; there is no need to pay fees for external help.
Even better, this approach can be completely customized. You get to create your own goals, make your own decisions, invest where you want and go at a pace you feel comfortable with. Every aspect is 100 per cent personalized. Designing your own financial roadmap can bring an incredible sense of accomplishment.
How financial literacy affects personal finance
Financial literacy is the cornerstone of money management. Once you understand how money works, you can make better financial decisions 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 an excellent online financial literacy course, for free. Open to everyone, it takes a few hours to complete and is taught by professors from the school’s Desautels Faculty of Management. After finishing all of the course modules, you receive a McGill Personal Finance Essentials attestation of completion.
The Government of Canada website is another great tool for learning how to manage your money, as Wood recommends. It explains making a budget, banking, credit reports and credit scores, insurance, retirement and estate planning.
Canada’s largest personal loan comparison website, LoansCanada.ca, can also help. It provides quotes from an array of lenders, can choose the best one for you and save you time and money.
How to achieve better financial health
Start by learning how to create a budget . A budget makes it easy to track and control spending and can help you reach your financial goals. With budgeting, you can create an emergency fund, something we all learned from the COVID-19 pandemic is now essential.
If you’re new to budgeting, try Mint , a free online budget tracker and planner. YNAB (You Need A Budget), personal budgeting software based on The Four Rules principle is another great option. Both will help you gain control of your money and make smart financial decisions.
Next, start investing . While investing may sound like a bit of a stretch when you’re just starting to get a handle on your finances, it’s actually a key component of financial planning. It allows you to grow your wealth and help you reach your long-term financial goals, such as retirement or saving for your children’s education.
Get started by opening up a tax-free savings account (TFSA) either online or in-person at your local banking institution. You might also wish to use a robo advisor; online investment management services like Wealthsimple or WealthBar are easy to use.
Finally, pay attention to debt management . Begin paying down your debts and only taking on new debt that you can handle. Remember that good debt can actually increase your credit score.
If you could use some extra assistance or a second opinion, seek the services of a credit counsellor. They can assist with basic budgeting, credit health, credit improvement and creating debt repayment plans. If you end up needing to pursue a more drastic option, such as debt consolidation, debt relief, consumer proposal or bankruptcy, they will advise you.
There’s certainly no shortage of help available. Start with the resources listed above and reach out for help if you need it. Managing your financial future can seem overwhelming, but it doesn’t have to be.