You can also review your past spending using your bank and credit card statements. When your next credit card bill comes in, give it a close read—you might be surprised by what you see. That could include recurring expenses you’ve forgotten about, such as subscriptions you no longer use, or fees you shouldn’t be paying. This is “zombie spending,” and it could be costing you hundreds of dollars per year.
4. Prepare for unexpected expenses.
Life happens—and never at a convenient time. Whether it’s a broken furnace, a dental emergency or a super-sized vet bill, surprise expenses are as unavoidable as they are unpredictable. They can derail your budget, but you can create a bit of a buffer by starting an emergency fund.
Start putting money into a separate savings bucket that’s easily accessible on short notice, such as a no-fee high-interest savings account. To help your emergency fund grow, you could also direct any gifts of money, work bonuses or tax refunds to this account, until you have enough of a cushion to weather life’s mishaps.
5. Assess your insurance needs and increase coverage if needed.
Many Canadians lack adequate insurance coverage. Even if you’re already insured, the rising cost of living means your current coverage amount may no longer be enough. It’s worth looking at the different types of insurance—life, home, auto, disability and critical illness—to see where you need to fill any gaps and help ensure that you and your family are better protected against financial hardship.
6. Take advantage of tax credits, tax deductions and government grants.
There’s a saying about not leaving money on the table. And it’s not just about RRSP (registered retirement savings plan) matching. Every year, the government announces new tax credits, claims and programs. So be sure you’re aware of what is available to help you keep money in your pocket.
For example, just opening an FHSA creates contribution room, even if you don’t put any money in it that year. Do you know the tax differences between a TFSA and an RRSP? A TFSA shelters the growth from taxes, while an RRSP delays the taxes owed on the income until retirement. There are other registered accounts to know about, too, including registered education savings plans (RESPs), registered disability savings plans (RDSPs) and more.
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7. Upgrade your financial know-how by learning from reputable sources.
There’s no lack of information about money, investing and finances—from social media to your neighbour, everyone wants to tell you what to do with your money. No wonder WFG reported that over a third (36%) of Canadians feel anxious about their finances, with 37% feeling concerned and 25% feeling strained by their current situation. The key is to know what information you can trust and what to scroll past and ignore. (Check your own financial resilience with WFG’s Financial IQ quiz.)
How? Check credentials, and consider whether the information pertains to you, your situation and where you live. See if the information is balanced and unbiased. If it is emotionally charged or designed to trigger a fear of missing out (FOMO), be very cautious. Also find out how the source of information, i.e. how the author makes money. This pertains to everyone and everything, from an influencer or planner to a financial institution and media website.
