I am thankful to CAWEE for being able to add my blog post to the website! Here are some financial planning hacks that could maybe help improve your financial health.
#1: Determine what type of household you are
Surplus: Your bank account is growing, and you may need to be more strategic with savings.
Net Zero: Or “paycheck to paycheck”. You’re making ends meet but aren’t equipped to handle a major expense.
Deficit: You’re spending more than you make, your credit card and line of credit balances are increasing.
#2 Tidy up your banking to streamline strategies
When your money is spread across several bank accounts and maybe even institutions, it’s much more difficult to keep an eye on what your money is doing. We often end up in these situations because it’s too hard to switch/merge bank accounts, especially when we blend households together. Please don’t tell me you keep your bank account because it’s the first one you opened 30yrs ago. Also, don’t get me started on the mess you may be leaving your executor to sort out should you pass away (sorry, I’m a planner and we talk about that!).
#3 Don’t be in a hurry to allocate surpluses
Expecting a big tax return? Have some other sort of windfall coming your way? Do not, I repeat, do not mentally spend this money before it’s even landed in your account. I strongly recommend (in particular if you’re a Net Zero or Deficit household) to park that money in a savings account. This money could be your superhero keeping you out of debt should a major expense come up. If at the end of the year that money is still sitting there, then feel free to allocate a portion of that.
OK! Those are my top tips to being financially sound. Do any of these resonate with you? For me, it’s making sure that I’m not mentally spending windfalls, unless it’s the multi-million lotto, then go ahead!
Sunny
Sunny Wishart, CFP® | Financial Planner | Mutual Funds Representative*
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Scotiabank | Scotia Financial Planning
309 Dundas St. W., Whitby, Ontario, L1N 2M6
T : 647.918.8611