Can you really DIY your personal finances?
We all want a solid financial plan in place, to be able to maintain a healthy financial life and reach our financial goals. Yet many in Vauxhall worry this isn’t something we can achieve on our own; don’t we need to pay for financial advice and leave the decision-making to the professionals?
Thanks to the abundance of online personal finance resources, that’s no longer true. These days it’s absolutely possible to gain control of your finances on your own; you don’t have to pay fees for external help.
This approach is completely customizable. Make your own decisions, create your own goals, choose your investments and go at a pace you feel comfortable with. Your plan can be 100 per cent personalized. Imagine the sense of accomplishment that comes with designing your own financial roadmap.
The role of financial literacy in personal finance
Financial literacy is the critical starting point. Once you are informed, 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 a fantastic, free online financial literacy course. It is open to everyone, takes a few hours to complete and is taught by professors from the school’s Desautels Faculty of Management. Finish all of the course modules and you’ll receive a McGill Personal Finance Essentials attestation of completion.
As Wood recommends, the Government of Canada website is another great tool. It explains the basics of managing your money, covering topics like budget making, banking, credit reports and credit scores, insurance, retirement and estate planning.
LoansCanada.ca is Canada’s largest personal loan comparison website. It can also help you make good financial decisions. The website provides quotes from a variety of lenders and it can even choose the best lender for you.
The steps to take to achieve better financial health
Everyone needs to learn how to create a budget. Budgeting lets you track and control spending and helps you reach your financial goals. With a budget in place, you can create an emergency fund, which we all learned from the COVID-19 pandemic is essential.
Unsure where to start? Check out Mint, a free online budget tracker and planner. Another wonderful resource is YNAB (You Need A Budget), personal budgeting software based on The Four Rules principle. Both will help you make sound financial decisions and gain control of your money.
The next step is investing. This may sound a little out of reach when you’re just starting out but it’s a key component of financial planning. Investing allows you to grow your wealth and help you reach your financial goals, especially the most important, long-term ones such as retirement or saving for your child’s education.
Open a tax-free savings account (TFSA) online or in-person at your local bank of choice. Consider using a robo advisor as well; online investment management services like Wealthsimple or WealthBar are easy to use.
Debt management is next. Begin paying down your debts and only taking on new debt you can handle. Remember that good debt can actually increase your credit score.
If you still need help, seek the services of a credit counsellor. They can assist with basic budgeting, credit health, credit improvement and creating debt repayment plans. If you need to pursue a more drastic option such as debt consolidation, debt relief, consumer proposal or bankruptcy, they will advise you.
Managing your financial future effectively can be challenging, but you definitely have the skills and ability. Start with the resources listed above and reach out for help if you need to.