Chart your financial future
A financial plan provides you with a complete picture of your finances – it not only encompasses longer-term goals, such as retirement planning, but also includes shorter-term goals, such as saving for a car or a home. A sound financial plan focuses on your current needs and future goals and puts strategies in place to help you achieve them. Focusing on your goals may help you to feel less uneasy during times of economic uncertainty.
Once you have a financial plan in place, it’s also important to revisit your plan regularly to confirm that you are still on track to meet your goals, or if adjustments should be made.
A Scotiabank advisor can help you create a financial plan that’s right for you.
Keep an eye on your finances
By creating a budget to keep track of your income and expenses, you’ll have greater control of your finances as you’ll know where your money is going. If you’re in a relationship, ensure you are both on the same page with regards to shared expenses.
An integral part of the budgeting process is gaining a solid understanding of all your expenses. Start by dividing them into two categories – discretionary and non-discretionary. This is an important step in achieving short-term priorities like paying monthly bills, and longer-term goals like buying a car or a home. Review your expenses and remove or reduce any discretionary or non-essential costs. Focus on budgeting for the non-discretionary costs that are “needs,” such as mortgage payments, rent, hydro, etc. Reassess your budget at least annually and prioritize your spending.
To help you get started, try the Scotiabank Money Finder calculator. It will help you determine if you have additional funds available to put towards your financial goals by comparing your income to your expenses.
Save for the good times and bad
You work hard for your money and deserve to enjoy the fruits of your labour. You may have your sights set on a home renovation, vintage furniture, a walk-in closet or a dream car. These things are within your grasp … if you save on a regular basis.
Unexpected expenses are inevitable, so an emergency fund should be part of your budget. If you set aside small amounts every pay period, you won’t need to access your savings or borrow from your credit card if something does arise, like a major car repair. A rule of thumb is to save the equivalent of three to six months of living expenses to get you through a financial setback or job loss.
If you haven’t been saving and want to start, or your savings aren’t quite where you want them to be, review your discretionary – i.e., non-essential – expenses and start cutting or reducing those costs to fund that cash reserve. If money is tight right now, try and start as soon as your family budget allows.
Make it easy on yourself by scheduling automatic deposits to your emergency fund through Pre-Authorized Contributions. Visit here to learn more about PACs.
Pay yourself first
If you’re looking for a convenient and flexible way to build up your savings for short and long-term goals, you may want to consider Pre-Authorized Contributions (PACs). With a PAC, you simply choose the amount you want to contribute and the frequency – for instance, weekly, biweekly or monthly. Even small amounts saved regularly can add up over time.
Prepare for the unexpected
COVID-19 has us all re-evaluating our current situation to ensure our families are protected in the event of an emergency. A sudden illness, disability or loss of life can put a substantial strain on a families’ finances. Making regular payments towards a mortgage, credit card, loan or line of credit may become difficult.
Scotia Creditor Insurance is optional protection that can help pay off your debt or cover your monthly payments in the case of loss of life, certain, specified critical illnesses, disability, job loss or a strike or lockout. To learn about the comprehensive range of affordable creditor insurance protection products available, speak with a Scotiabank advisor or visit scotiabank.com/insurance.
It’s also important to take the time to review your estate plan and ensure your Wills and Powers of Attorney are up to date and reflect your wishes. Remember the importance of life insurance; review your policy to ensure it’s appropriate for you and your family, and your current needs.
Legal Disclaimer: This article is provided for information purposes only. It is not to be relied upon as financial, tax or investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. Information contained in this article, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and The Bank of Nova Scotia is not responsible to update this information. All third party sources are believed to be accurate and reliable as of the date of publication and The Bank of Nova Scotia does not guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific financial, investment and/or tax advice tailored to their needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.