10 tips to take command of your finances

Take these steps to feel confident and in control of your money

At different times of the year, certain things may get you thinking about your financial situation. For some, relocation, deployment, or a career change offer an opportunity to create a new budget and a financial plan. For others, approaching the end of the year, making a big purchase, a death in the family or tax filing brings household finances sharply into focus.

Whatever you have on your plate right now, you can take the worry out of money by ensuring the fundamentals are in place.

Top 10 ways to take charge of your money

Develop a realistic budget

Start by tracking your spending to get a clear idea of where your money is going each month. Identify your living expenses, debt payments and savings goals. Keep in mind, it’s best to look after necessities before accounting for things you want. Try to follow your budget as closely as possible to ensure your spending is less than your income. Discover more tips on what to include in your household budget.

Clarify your financial position

Sit down with a SISIP advisor to calculate your net worth. This can offer a view of your financial health and be used as a baseline to track progress toward your financial goals.

Set financial goals and make a plan

Once you have a clear idea of your spending and your net worth, it’s time to give some thought to your financial targets. Determine short-term, mid and long-range money goals. This could include home renovations, your next vacation, post-secondary education or retirement planning. Work with your SISIP advisor to put your financial plan in place.

Start saving and pay yourself first

With a clear plan, you can start regular savings to reach your targets. Allocate 10% each pay cycle to a separate account before you have a chance to spend it. Once you’re in the habit, consider saving into various buckets, including for periodic expenses like car and home maintenance and an emergency fund equivalent to a few months’ salary. Sit down with a SISIP advisor to determine if a registered retirement savings plan (RRSP) or a tax-free savings account (TFSA) is your best option to build wealth for retirement.

Pay bills on time

It may not seem like a big deal, but regularly missing bill payments can affect your credit rating. If you can’t afford to pay bills as agreed, contact your creditors to explain your situation.

Set automatic withdrawals

Systemize your bill payments and savings using automatic withdrawals. This gets the cash out of your main account before you can be tempted to spend it and ensures you avoid late fees on your bills!

Use credit wisely

Carrying debt on credit cards is expensive. There are often more practical ways to purchase big-ticket items, which may include a loan or line of credit. The important thing is to determine the total you can comfortably afford to purchase on credit and pay back each month. Keep in mind, credit repayments, (other than your mortgage), should represent less than 20% of your net income. Avoid borrowing from one creditor to pay another.

Apply quick debt repayments

Generally, the faster you pay off your debts, the less you’ll pay in interest. Commit 20% of your net income to your debt repayment and see how quickly you can lower the amount of money you owe to creditors. By clearing debt, you free up cash that can be used to meet your financial goals. Read more ways to tackle debt fast.

Protect your family

Assess how much life insurance, medical, property and disability insurance you need to protect your loved ones. Keep in mind your coverage needs may change with any big changes in life, including a move, a death, or a new financial situation. Get in touch with a SISIP advisor for a tailored assessment of your insurance needs so you’re well protected, without overpaying.

Update your will and power of attorney

If you own property, owe money or have dependents that rely on you, estate planning is critical. A legal will offers a step-by-step guide to your loved ones who will manage your estate when you die. Powers of attorney name trusted people to act on your behalf to make financial and medical decisions if you’re unable to do so.

As a member of the Canadian Armed Forces, you have access to free financial advice, debt counselling and insurance tailored to your military lifestyle. SISIP Financial advisors are embedded in the military community, so we understand the unique needs of the CAF.

SISIP advisors are on bases and wings across Canada. Reach out with any money questions you have. That’s why we’re here.

The comments contained herein are a general discussion of certain issues intended as general information only and should not be relied upon as tax or legal advice. Please obtain independent professional advice, in the context of your particular circumstances. This article was written, designed and produced by SISIP Financial, for the benefit of SISIP Financial a registered trade name with Investia Financial Services Inc., and does not necessarily reflect the opinion of Investia Financial Services Inc. The information contained in this article comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any securities. Mutual Funds are offered through Investia Financial Services Inc. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated.