Regain control of your money with DIY personal finance

Are you ready to DIY your personal finances?

Most of us set goals for the future, and a good financial plan will get us there. We hope for healthy financial lives and to be able to reach the financial goals we’ve set for ourselves. Many Outlook residents, however, wonder if this can be achieved on our own. We think we have to pay for financial advice and leave the decision-making to the professionals.

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That’s not true, however, as there is an abundance of online personal finance resources available now. You can definitely take control of your finances yourself and you don’t need to pay fees for external help.

The best part? You can completely customize your plan. Set your own goals, make your own decisions, select your investments and go at a pace you feel comfortable with. You’re sure to feel a great sense of accomplishment in designing your own financial roadmap.

Personal finance and financial literacy

Financial literacy is the basis of personal finance. You have to first understand how money works to 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.”

An online financial literacy course is offered by McGill University and it’s free. Open to all, it takes a few hours to complete and is taught by professors from the school’s Desautels Faculty of Management. After finishing all of the course modules, you’ll receive a McGill Personal Finance Essentials attestation of completion.

As Wood recommends above, the Government of Canada website is very useful. It covers all of the money management essentials, including budget making, banking, credit reports and credit scores, insurance, retirement and estate planning.

LoansCanada.ca is another helpful site. Canada’s largest personal loan comparison website, it gathers quotes from a number of lenders, chooses the best option for you, saves you time and helps you make smart financial decisions.

The steps to take for better financial health

Start by creating a budget. With it, you can track and control your spending because it lets you see exactly where your money is going. Budgeting can also help with savings and building an emergency fund, which we’ve learned from the COVID-19 pandemic is no longer a luxury.

Try out Mint, a free online budget tracker and planner, or YNAB (You Need A Budget), personal budgeting software based on The Four Rules principle.

The next step? Investing. It’s a key part of financial planning, even if you are just starting out. Investing is how you can grow your wealth and reach financial goals, such as saving for a down payment, your child’s education or retirement.

Everyone should have a tax-free savings account (TFSA), an excellent savings vehicle for Canadians. Online investment management services like Wealthsimple or WealthBar, which are considered robo advisors, are easy to use and also worth a try.

Make a plan for debt management and start paying down what you owe. Only take on new debt you can handle, keeping in mind that good debt can actually increase your credit score.

If you have any questions, seek out the services of a credit counsellor. Basic budgeting, credit health, credit improvement and creating debt repayment plans are just some of the things they can help with. They will advise you if you happen to need a more drastic solution, such as debt consolidation, debt relief, consumer proposal or bankruptcy.

When you are financially literate it will inform many of the decisions you make over the years, whether saving, spending or borrowing. It’s a goal every one of us should have, one that makes managing money effectively that much easier.

© The Outlook

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