It is possible to DIY your personal finances?
Everyone wants to have a financial plan in place, to be able to maintain a healthy financial life and reach our financial goals. Yet many in Taber think this isn’t achievable on our own. We feel we need to pay for financial advice and leave the decision-making to the professionals.
Fortunately, this is an old way of thinking that’s no longer true. Thanks to the abundance of online personal finance resources available, it’s entirely possible to gain control of your finances yourself; there’s no need to pay fees for external help.
This approach even offers you 100 per cent personalization. Customize your plan, set your own goals, make your own decisions, choose your investments and go at a pace you feel comfortable with. Imagine the sense of accomplishment you’ll feel from designing your own financial roadmap.
The role of financial literacy in personal finance
Financial literacy is really just a set of tools everyone must have. Educate yourself so that you can make better financial decisions in each of the 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 great online financial literacy course for free. Open to all, it takes a few hours to complete and is taught by professors from the school’s Desautels Faculty of Management. When you finish all of the course modules, you’ll receive a McGill Personal Finance Essentials attestation of completion.
As Wood recommends, another excellent tool is the Government of Canada website . It explains every aspect of managing your money, from budget making, banking, credit reports and credit scores, insurance and retirement to estate planning.
LoansCanada.ca, Canada’s largest personal loan comparison website, can also help. The site provides an array of quotes from different lenders; it can select the best lender for you and save you time and money.
Steps to achieving better financial health
Start by learning how to create a budget . Having a budget allows you to track and control spending; you will see where your money is actually going. Budgeting also helps with things like creating an emergency fund, something the COVID-19 pandemic has taught us is essential if you want to be prepared for the future.
Check out Mint , a free online budget tracker and planner. Personal budgeting software YNAB (You Need A Budget) , another option, is based on The Four Rules principle . Both of these will help you make smart financial decisions and gain control of your money.
Next up is investing. This may sound like a big leap when you’re just starting to manage your finances, but it’s a key component of financial planning. Investing allows you to grow your wealth and help you reach financial goals, particularly long-term ones like retirement or saving for your child’s education.
Open up a tax-free savings account (TFSA) either online or in-person at your local banking institution. Robo advisors are also growing in popularity—consider online investment management services like Wealthsimple or WealthBar , both of which are easy to use.
The next step is establishing a solid debt management plan. Start paying down your debts and only taking on new debt you can handle; good debt can even increase your credit score.
If you still feel you need guidance, seek out the services of a credit counsellor. They can help with basic budgeting, credit health, credit improvement and creating debt repayment plans. If you need a more drastic option such as debt consolidation, debt relief, consumer proposal or bankruptcy, they can advise you.
Learning how to manage your finances on your own is absolutely possible. Start with the resources listed above and reach out with any questions.