How DIY personal finance can help boost your savings

Did you know you can DIY your personal finances?

Setting goals for the future is important and requires a solid financial plan to get you there. We want healthy financial lives and to reach the financial goals we’ve set for ourselves. Many in Preeceville, however, doubt this can be achieved on our own. We think we should pay for financial advice and leave the decision-making to the professionals.

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That’s no longer true, however, because there is an abundance of online personal finance resources available. You can definitely take control of your finances yourself, without needing to pay fees for external help.

The best part of this approach: you can completely customize it. You set your own goals, make your own decisions, select your investments and go at a pace you feel comfortable with. You’ll feel a great sense of accomplishment in designing your own financial roadmap.

Laying the groundwork: Financial literacy and personal finance

Financial literacy is the starting point in effectively managing your money. You have to understand how money works to 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.”

There’s a wonderful online financial literacy course offered by McGill University 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 you’ve finished all of the course modules, you’ll receive a McGill Personal Finance Essentials attestation of completion.

The Government of Canada website is also highly instructive, as Wood recommends. It touches on all of the money management basics, including budget making, banking, credit reports and credit scores, insurance, retirement and estate planning.

Another helpful site is LoansCanada.ca, Canada’s largest personal loan comparison website. It assembles quotes from a variety of lenders, suggests the best option for you, saves you time and helps you make smart financial decisions.

A roadmap to better financial health

The best place to start is to create a budget. It’s the best way to track and control your spending as it lets you see exactly where your money is going. Budgeting also helps you prioritize savings and build an emergency fund, which COVID-19 has taught us is an absolute necessity.

Try out Mint, a free online budget tracker and planner, or YNAB (You Need A Budget), personal budgeting software based on The Four Rules principle.

The next step is investing. Investing is a key part of financial planning, even when you’re just starting out. It’s what allows you to grow your wealth and help you reach short- and long-term financial goals, such as saving for a down payment, your child’s education or retirement.

Be sure to open your own tax-free savings account (TFSA), if you haven’t already. It’s an excellent savings vehicle for Canadians. You might also want to try using a robo advisor; online investment management services like Wealthsimple or WealthBar are easy to use.

Finally, tackle debt management. Begin paying down what you owe. Be careful to only take on new debt that you can handle, remembering that good debt can actually increase your credit score.

Seek out the services of a credit counsellor if you have any questions. They can help with basic budgeting, credit health, credit improvement and creating debt repayment plans. If you happen to need a more drastic solution, such as debt consolidation, debt relief, consumer proposal or bankruptcy, they will advise you.

Achieving financial literacy will inform many of the spending, saving and borrowing decisions you make now and for years to come. It’s an excellent goal, one that will make managing your money well much easier. If ever you need a second opinion, help is available.