Heading off to college or university is a big milestone and a time that's filled with lots of excitement, and anxiety. Just like with most things in life, it pays to be prepared.
Studies have found that those who have a strategy for financial health save more money and are financially healthier. To avoid overspending, make sure you know what's coming in vs. what's coming out by tracking your spending to the dollar.
5 tips for an A+ on your student budget:
1. Make a budget and stick to it
Making a budget with the help of this student budget template is easy, sticking to your budget can be difficult. In the next points, I will show you how to make sticking to your budget simple.
2. Put yourself on payroll
If you’re funding your expenses through a student loan, stay within your budget by paying yourself on a weekly, bi-weekly or monthly basis from your loan. By paying yourself on pay day, it will be much easier to gauge your spending and you will gain real-life experience in pay day excitement.
3. Put money aside for your necessities first
Consider this scenario. You check your bank account before you leave for the night and you see you have a few hundred dollars left. What you’re forgetting is that you haven’t paid for that utility bill yet.
You will avoid this by putting the money for bills in a separate place. Sometimes we’re in a rush and make mistakes, but segregating your money is a great way to ensure you’re never unintentionally tapping into your bill money for fun.
4. Track and review your weekly spending
A budget means nothing if you don’t follow it. Put all your purchases on debit, or keep your receipts. Take a few minutes every week to see how well you’re sticking to budget. Don’t forget to make any necessary adjustments.
5. Draw a clear line between wants and needs
A 2:42am burrito isn’t filed as a grocery item. A late-night burrito is perfectly fine, if you have money left in your “Take Out/Order In” category from the budget template above.
Budgeting doesn’t mean restricting all spending to $0. Follow these tips and you will mitigate the stress of finance in your already stressful life. A good budget reflects what you can afford, or in some cases, what you are comfortable paying back once your university or college education is complete. Most of all, your well-planned budget makes your financial health better.
How to Stay on Track for Retirement
Whether you’re planning to leave the workforce in five, 10, or even 30 years, it’s vital to stay on top of your retirement plan. Statistics Canada found that since the 1970s, the number of Canadians with an employer group retirement savings plan dropped from 46% to 37%. With the number of employer group retirement plans decreasing, it’s more important than ever to follow these five tips to stay on track for retirement.
Talk to a professional and create a financial strategy
Working with an advisor to create a financial strategy allows you to live your best life now, without jeopardizing your retirement in the future. A financial strategy helps set goals into perspective and allows for adjustments if need be.
I will help organize your current finances and achieve your financial goals head on. With a financial strategy, clear set goals and a tangible course of action, you’ll feel comfortable about your financial future.
Get professional retirement advice
Where better to get advice about retirement than from someone who specializes in retirement planning, investment strategies and money management? Other than medical situations, paying for financial advice is probably the one profession that’s worth the cost.
Without professional retirement advice, it’s up to you to figure out how to retire with financial stability. Are you prepared to do that? People live a large portion of their lives in retirement and professional advice can help you make the best decisions based on your personal situation.
Create a retirement-friendly budget
It’s very common for people to get wrapped up in their day-to-day finances and forget about their future. If you’re tight on money now, a budget can help improve your current and future situations.
Even small contributions to your retirement savings plan can go a long way over time as they quickly add up. Adding retirement savings (no matter how big or small) into your monthly budget will help achieve retirement success.
Turn unexpected into retirement savings
If you receive a bonus at work or an unexpected cash windfall, it’s a fantastic opportunity to add some extra money into your retirement savings. Unexpected money is very easy to waste, and if you’re not on track for retirement, you owe it to yourself to save for your future.
It’s always a good time to start planning for retirement
If you think you’re too young to start planning, think again. Thanks to compounding returns even small investments in your 20s can grow into big savings for your future. How you tackle retirement in your younger years may look different than it does if you’re in your 40s, but it’s a great idea to start thinking about it and planning for it sooner than later.
When it comes to saving and planning for retirement, professional advice can go a long way. Whether your retirement is in the near future or several years down the road, it’s always a good idea to plan ahead and seek professional advice. Contact me today if you want to create a retirement plan or check in on your current plan to ensure you’re on the right track towards a successful retirement.
4 Questions to Ask Your Financial Advisor
Did you know a financial advisor can help you live your best possible life within your personal budget? According to The Investment Funds Institute of Canada, you are more likely to become wealthy if you meet with your financial advisor on a regular basis. “Academic studies confirm the higher levels of wealth achieved by those who use advisors on an ongoing basis. These investors also have better savings habits and are more confident in their ability to meet their retirement income needs.”
As your financial advisor, I help structure your finances and set attainable goals. All the while ensuring you’re on track and on time to meet financial milestones. I won’t say you can’t buy a sports car or take on the home renovation project of your dreams; my job to help you manage those plans along with your core financial goals. If you want to improve your finances, all you have to do is ask.
Here are four questions to ask your financial advisor:
Am I ready to retire?
To find out if you’re ready to retire, we’ll explore your financial situation as well as your goals. This will help determine if you’re ready to leave the workforce based on how much money you have saved and what type of lifestyle you want (and can afford) during retirement.
How much money do I need to save for retirement?
The amount needed for retirement is based on several factors, both personal and financial. These financial factors include your own personal savings accounts and group savings plans as well as outside sources of income such as the Canada Pension Plan and Old Age Security.
Personal factors that determine how much you need to save for retirement include your target retirement age as well as your tolerance for risk with different investment options.
Where is the best place to put my money?
We will work together to determine your current and future financial goals and figure out the most efficient way to reach them. The way you save and how you want to withdraw money in retirement will determine how we invest now.
There are several different account options available such as a Tax-Free Savings Account, a Registered Retirement Savings Plan (RRSP) and non-registered investment accounts.
How can I earn interest on my investments?
Earning interest and other returns on your investments is a great feeling and it helps your account value grow over time. You can earn different levels of return on your investments including interest, dividends and capital gains.
The type of return earned depends on the type of investment option chosen, income investments provide different levels of security and returns than equity investments. As your financial advisor, I can help determine the best investment options and strategy.
It’s important to plan your financial future with eyes wide open. This includes staying informed and working with a professional. You want to know how much money you need in retirement, which account type is best for your goals (and your taxes) and what types of investment options are available. When it comes to your finances, no question is too small and every question is important. Let’s work together to answer your financial questions and plan for retirement.
6 Financial Resolutions for 2018
The new year is a time to reflect and improve on ourselves. Many Canadians choose to make new year resolutions and financial goals are usually at the top of the list.
These tips will help you set (and achieve) successful financial resolutions in 2018.
Six financial resolutions to make this year:
1. Improve your financial literacy
The Canadian Financial Literacy Database helps you build an understanding of personal finance. Even if you don’t manage your own money, a basic understanding of terminology helps you better communicate your goals with a financial advisor.
2. Put the brakes on a big purchase
If you’re considering replacing an old car this year ask yourself if it can wait. If your car is paid off, the maintenance cost is likely less than payments on a new vehicle. You can use these savings to get ahead on the purchase of your dream car in the future. These principles can be applied to other big expenses like kitchen appliances or home renovations.
3. Practice patience with your purchases
To prevent overspending and impulse buying, wait a couple of weeks before making unnecessary purchases. If you wait long enough you might forget about it all together. Unfortunately, some purchases can’t be avoided. For the bigger necessary purchases, give yourself time to shop around and wait for a good deal.
4. Find leaks in your budget
Fees, impulse buying and overage charges on internet or cell phone plans are all examples of budget leaks. To fix these leaks, spend a month tracking your spending. This helps you find money you didn’t even realize was being spent. Patching up your budget leaks can help save $10s, $100s, or even $1000s this year!
5. Invest in your career
Investing in your primary source of income is a terrific way to earn more money this year. You can use Glassdoor to see if you’re getting paid fairly based on your experience and job title. You can use this information to ask for a raise or leverage it to get a better offer in a new job. To advance your career, you can also do a Google search for certificates or other learning opportunities in your industry.
Bring a new attitude to your money with these financial resolutions for 2018. These tips can make you smarter about your money, save more and live happier. Get in touch to find out how to make your 2018 financial goals come true.
6. Build an emergency fund
One of the first steps towards financial independence is protecting yourself against unexpected expenses such as car repairs, home renovations and changes in employment. According to the Financial Post, only a quarter of Canadians have a rainy-day fund.
If an emergency happened in your life, would you need to take on debt? Talk to your financial advisor about how building an emergency fund can help avoid getting into debt.
Common Investment Myths – And How to Break Them
Let’s talk about investment myths. Have you started investing yet? If the answer is yes, think about the last time you sat down with a financial advisor and reviewed your portfolio to ensure your investment strategy is still aligned with your goals. If the answer is no, ask yourself why not? Maybe it’s because you don’t think you can afford it, maybe it’s because you’re afraid of the risk versus reward or maybe it’s because you don’t see the value in paying fees.
Here’s the good news, today I’m debunking common investment myths. Actually, I’m going to shatter them. Whatever the reason may be that’s holding you back from reaching your full investment potential, it all ends now. If you’re hesitant about seeking financial advice, investing in the market and exploring different investment options, don’t worry because other people are too – that’s why there are so many common investment myths.
The key is to tell the truth about the current state of investing and help Canadians implement an investment strategy that you’re comfortable with.
Here are the real answers to three common investment myths:
I can’t afford to invest
Yes, you can. Everyone, whether you’re 16 or 56 can afford to put a portion of your after-tax income towards investing. The percentage varies depending on your monthly household expenses and individual disposable income, but yes everyone can afford to invest. So often people feel that saving investing are just for the wealthy – and that’s just not true.
I don’t need professional advice
Oh yes you do, everyone does. Why? Because there is so much more to creating an investment strategy than choosing the right stock at the right time – and I don’t do that because that’s not what smart investing is about.
The truth is investing is about finding solutions that align with your short term and long-term goals as well as your risk tolerance and time horizon. The Manulife investment philosophy is “There’s a difference between access to investments and investing successfully. Managing money wisely is a full-time job which takes experts with significant experience and skill.”
On a side note, timing the market to buy in on the absolute lowest day of the year and selling on the absolute highest day of the year to gain the maximum profit is another common investment myth. That doesn’t happen.
I shouldn’t have to pay fees
Well yes you should. In life we all have to pay for a professional service. I can’t think of a scenario where you get a service for free – except for the library. If you want the best dentist then you have to pay for it. The exact same principal is true when it comes to investing.
Of course, you can open a self-directed online brokerage account and manage your own money, but do you have the years of experience and professional expertise of a financial advisor? This is the real reason why paying for a professional service is worth the cost. It’s about access to investments (because you could do that yourself online) it’s about the experience and the expertise.
I hope this helps overcome some of your hesitations when it comes to building a relationship with a financial advisor and creating an investment strategy that fits your individual needs. If you want to discuss other common investment myths then let’s chat.
*This content was originally created by Manulife Securities for information purposes only. It has been distributed for advisor publication.*
3 Investment Tips for Millennials
Let’s be honest, investing isn’t always easy – at least it doesn’t always seem that way. With so many different options available on the market (from mutual funds to stocks), choosing the best strategy can be overwhelming. That’s where the assistance of a financial advisor comes into play.
It’s very easy to get caught up in hot tips, news headlines and guidance from family and friends. It seems like everywhere we look someone is giving millennials investment tips. The truth is finance is personal, and that’s why it’s so important to get tailored advice from a professional. With that being said, there are some pieces of advice that all young investors should know.
Here are three investment tips for millennials who want to start investing:
Start as early as possible
Yes, that’s right, young people should have started investing way before they were coined as millennials. As soon as you have an income (no matter how big or small) a portion of your paycheque should go into savings.
Thanks to a little thing called compound interest there are big benefits for millennials who start investing early. Compound interest helps your investments grow faster because your monthly earned interest (or dividends or capital gains) is reinvested back into your account. Therefore, the next month you earn interest on the previous month’s interest and so on for years to come. It’s brilliant.
Think long term with your strategy
According to Forbes, investing for the long term helps millennials see the bigger picture when it comes to risk versus reward in your portfolio. “Risk is kind of like that friend who regularly cancels plans but always comes through in a pinch. There might be heartache in the day-to-day, but in the long run, you’ll be glad you stuck it out.
In investing, more risk means the potential for more reward. Could you lose money and never collect that premium? Sure, but that’s unlikely when you’re in it for the long-term.”
Be honest with your financial advisor
Professional advice can help find an investment strategy that fits your individual plan, financial capabilities and life goals. However, that can only happen if you are completely honest with your advisor.
Think of a financial advisor as your financial doctor, they can’t totally assess the situation and provide a recommendation until they have all the information. This includes your short term and long-term goals, tolerance for risk, time horizon and general knowledge of the investing world.
If you have questions about investing or want to start investing but don’t know where to begin, I’m happy to help. Let’s chat about your goals and investment options for millennials.
*This content was originally created by Manulife Securities for information purposes only. It has been distributed for advisor publication.*