Did you know that November is Financial Literacy Month in Canada? And this year marks the 10th anniversary! The goal of Financial Literacy Month is to ensure that Canadians have the knowledge, skills and confidence needed to make informed decisions about the financial products and services that best meet their needs. Being financially literate is an important factor in reaching your overall financial goals no matter where you are in your financial journey. Here are 5 simple tips to help homeowners and homeowner hopefuls improve their financial literacy this year.
Stay Up to Date on Financial Products and ServicesIf you’re on your journey to becoming more financially literate the great news is that there are many resources available to help you on your way. Whether you’re into books, blogs or podcasts, you can find information on almost any financial topic you’d like to learn more about. One way to slowly build your financial literacy without getting overwhelmed is to set aside 10 minutes a week to learn something new about finances. While some financial tips can apply no matter where you are, try to find Canadian sources for the most accurate financial information and product details.
Schedule Financial Check-InsFor some people, handling their finances can be challenging and sometimes even stressful. One report found that 48% of Canadians say they’ve lost sleep because of financial worries1. One way to alleviate some of that stress is to schedule regular financial check-ins. Pick a frequency that works for you, maybe monthly or quarterly depending on your situation, and set aside some time to go over your finances. This is a great practice to do as a couple or family so everyone is on the same page financially.
Financial Check-In Checklist- Upcoming bills or one-time expenses like property taxes
- Changes to income
- Savings accounts and investment balances
With a quick tap or a click making purchases is easier than ever. That’s why it’s a great idea to review your spending so you know exactly where your money is going. Many banking apps will provide a breakdown of your spending so you can see how much you’ve spent in each category. And don’t forget about the money spent on recurring purchases and subscriptions. While these automatic withdrawals can be convenient, they can add up over time. When you know where your money is going, you’re able to make better financial decisions.
Set Up An Emergency FundAn emergency fund is money set aside specifically to be used in case of an emergency, like job loss or a medical emergency. Most experts will recommend you aim to save about 3 to 6-months’ salary but any amount you can save will help if you are faced with financial difficulties. Your emergency fund should be easily accessible in case you need to access it right away. A high-interest savings account with no or low fees is a great option. Another tip is to set up your emergency fund separate from your day-to-day banking, that way you’re even less likely to use the funds for non-emergencies.
Create Realistic Financial GoalsThinking of buying a home or vehicle or perhaps taking that dream vacation when it’s safe to travel again? Establishing realistic financial goals can help you take the steps you need to reach your goals faster. Prioritize your goals and think about what makes the most sense for your life. Then, do some research to figure out how much you’ll need to save towards your goal and determine when you’d like to achieve it by. For example, if you’d like to purchase a car in two years and you need $12,000 to buy it, you’d need to save $500 a month, or $17 a day. If that seems like a manageable amount based on your other financial commitments, then you’ve set a realistic savings goal. If not, try and make some adjustments until you can find a goal that will work for you and then stick to it.
Every step you take towards improving your financial literacy is a step in the right direction. Hopefully, these tips will help you along your journey and give you more confidence when it comes to your finances!
1 Financial Planning Standards Council, “OMNI REPORT: Financial Stress,” 2018.