Can you really DIY personal finance?
To meet the goals we set for ourselves and to maintain a healthy financial life, we need to have a solid financial plan. Many Thorold residents wonder if this is actually achievable though. We’re so used to paying for financial advice and leaving the decision-making to the professionals.
Thankfully there is now an abundance of online personal finance resources available, so you don’t have to rely on this approach. You can take control of your finances completely on your own these days. There is no longer the need to pay fees for outside help.
Set your own goals, choose your own investments and go at a pace that feels comfortable to you. It’s an approach that is 100 per cent personalized to your unique situation. Imagine the sense of accomplishment that comes with designing your very own financial roadmap.
How financial literacy affects personal finance
Without financial literacy you may struggle to make sound financial decisions. Everyone needs to understand how money and finances work. If you take the time to educate yourself, it will help 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.”
An online financial literacy course is available for free from McGill University. Open to everyone, it takes a few hours to complete and is taught by professors from the school’s Desautels Faculty of Management. You even receive a McGill Personal Finance Essentials attestation of completion after finishing all of the course modules.
Another go-to resource is the Government of Canada website, which Wood recommends. This comprehensive site covers every facet of money management, including budget making, banking, credit reports and credit scores, insurance, retirement and estate planning.
LoansCanada.ca, Canada’s largest personal loan comparison website, is another great site to visit, as it can help you make good financial decisions. It supplies quotes from different lenders and can suggest the best one for you, saving you time and money.
A step-by-step approach to improving your financial health
Start by learning how to create a budget. A budget is a tool that tracks your money and can help you control your spending; you’ll see where every dollar is going. Budgeting can also help you with savings; it can help you set aside money in an emergency fund, something we’ve all discovered the importance of during the recent COVID-19 crisis.
There are several online resources to help you take control of your money. Mint, a free online budget tracker and planner, and YNAB (You Need A Budget) , personal budgeting software based on The Four Rules principle, are easy to use and quite instructive.
You also need to be investing. This is the best way to reach those milestone life goals, such as paying for your children’s post-secondary education or retirement. Investing puts your money to work for you and allows it to grow.
If you haven’t already, open up a tax-free savings account (TFSA), an excellent savings vehicle for Canadians. Also, try using a robo advisor; online investment management services like Wealthsimple or WealthBar are straightforward.
Finally, pay attention to debt management. Start paying down your debts, reducing your debt load, and only take on new debt you know you can handle. Good debt can actually increase your credit score.
Feel free to reach out to a credit counsellor at any point. They can assist with basic budgeting, credit health, credit improvement and creating debt repayment plans. Should you require a more drastic solution such as debt consolidation, debt relief, consumer proposal or bankruptcy is required, they can advise you.
Taking control of your financial future feels great and gives you a sense of fulfilment and purpose. And remember, help is always available.