Is it really possible to DIY your personal finances?
We all want to have a financial plan in place, to maintain a healthy financial life and reach our financial goals. Unfortunately, many in Thompson think this isn’t something we can achieve by ourselves; we need to pay for financial advice and leave any decision-making to the professionals.
Now that there are many online personal finance resources, that’s no longer true. You can absolutely gain control of your finances yourself and there is no need to pay any fees for outside help.
You can also completely customize your approach. Design your own plan, make your own decisions, invest in what you want and go at a pace you feel comfortable with; it’s 100 per cent personalized. Imagine the sense of accomplishment that comes with successfully designing your own financial roadmap.
The role of financial literacy in personal finance
Financial literacy is essential. Arm yourself with information so 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.”
To help, McGill University is offering a 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. When you finish all of the course modules, you’ll receive a McGill Personal Finance Essentials attestation of completion.
Wood recommends another great tool: the Government of Canada website. It explains how to manage your money in detail, including budget making, banking, credit reports and credit scores, insurance, retirement and estate planning.
Another helpful source is LoansCanada.ca, Canada’s largest personal loan comparison website. It provides multiple quotes from different lenders and chooses the best lender for you.
Steps to achieve better financial health
Learning how to create a budget is an important first step. Having a budget lets you track and control your spending, showing you exactly where your dollars go. With budgeting, you can create an emergency fund, something the COVID-19 pandemic has taught us is essential.
If you’re wondering where to start, try Mint, a free online budget tracker and planner. Another great resource is YNAB (You Need A Budget), personal budgeting software based on The Four Rules principle. Both help you see the big picture with your money.
Next up, start investing. It may seem out of reach when you’re just getting started handling your finances, but it’s a key component of financial planning. Investing is what allows your wealth to grow and helps you reach financial goals, especially long-term ones like saving for your child’s education or your own retirement.
You can open up a tax-free savings account (TFSA). If you’re comfortable with online banking you might also want to try using a robo advisor; online investment management services like Wealthsimple or WealthBar are easy to use.
Finally, turn your thoughts to debt management. You should begin paying down your debts; also, be careful to only take on new debt you can handle. Good debt can actually increase your credit score.
If you still feel you need help, enlist the services of a credit counsellor. They can assist with basic budgeting, credit health, credit improvement and creating debt repayment plans. Should you need to pursue a more drastic solution such as debt consolidation, debt relief, consumer proposal or bankruptcy, they will advise you.
Managing your financial future can seem daunting, but it doesn’t have to. Start with the resources listed above and track your progress. You can always reach out for help or advice if you need to.