Managing your finances can be tricky. It’s an ongoing task as life always throws a curveball at you. This could be an unexpected expense or blowing your budget on something nice. But it’s easy to get your finances back on track. These tips will help you get back to some basics and start building towards your goals.
Deal with debt
Don’t get down if you’re having trouble paying off loans, credit cards or other debt. Instead, look into exactly how much you owe and what options might be available to you.
As an example, you could contact your credit card provider and negotiate a lower APR. You could also look into a balance transfer credit card to clear your debt quicker at 0% interest for a specific period of time.
If you’re only making the minimum repayment on your debts, consider increasing this amount where possible. Whilst this will eat into your budget, you’ll reduce your debt quicker. You’ll also reduce the amount that goes to covering the interest.
This will take time and effort, but it’s a worthwhile investment into getting back on track.
Start an emergency savings fund
Life happens and unexpected expenses do occur. You can protect yourself though, by building up an emergency fund. By saving as and when you can, you can minimize the impact the expense may have on you.
Building up about 3-6 months worth of living expenses should provide enough to avoid a crisis and keep you on track.
Review your auto and home coverage
A little bit of research to review your car and home insurance costs and needs can go a long way. Most people will auto-renew their policy, but shopping around can save hundreds of dollars per year. Keep note when your existing policy comes to end; about 4-6 weeks before the policy ends, get quotes from different providers.
Max out retirement plan or TFSA contributions
This is very much dependent on your circumstances. That said, contributing the maximum amount each year to your retirement account (RRSP) is worthwhile. If you’re over 50 and haven’t saved much for retirement, consider a RRSP, especially if offered through your employer.
If you have a large amount of savings, consider paying into a TFSA if you haven’t already done so. The tax advantages of both accounts can further your financial and retirement goals.
Increase your savings
Taking some time to look at recent bills or credit card statements is a good tactic when thinking about increasing your savings. It helps identify areas where you may have overspent, and may even trigger cutting back on your spending.
Identifying areas where you can increase your savings can be incredibly incentivizing. As is achieving your savings goals much quicker than you thought.
Do not put off working on your taxes
Preparing your taxes ahead of time may seem like a scary idea, but there are plenty of reasons to do so. It’s not unheard of to receive a substantial refund and apply for benefits that you are eligible for.
That said, if you don’t file your taxes on time, you may face consequences with the CRA.
Essential information
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