# data[].attributes.body
Today you will be learning a little more about the importance of financial planning and of giving yourself a safety net for those hard times.

# data[].attributes.body
This video is a great way to introduce our topic and skim over a few of the more important ideas to come. A personal safety net is intended to assist you when you may need financial support without much warning if you have a fall at work or if you lose your job entirely, and this video shows how to begin preparing this for yourself. Now even though this video is not Canadian I feel as though it doesn't lose any of its delivery of the core idea of beginning your savings. Now we go a little more in depth with these ideas.

# data[].attributes.body
Are you one of those people thinking "what does this student know about long term money plans"? Well if you are then here is a video of financial planners and financial experts discussing the most important practice in saving. It is a saying that will be found throughout this Padlet as I am a strong believer in it as well and that is, "set it and forget it". Allowing your money to automatically go into your savings takes out the action of actually saving it yourself and eliminates those human moments where we might choose to treat ourselves one week because we've been "so good'.

# data[].attributes.attachment_link.title
What’s one positive personal finance habit you wish every Canadian would practise?

# data[].attributes.body
Now wanting to save money is the first step but where does that money come from? This video is a great in depth look into a ton of savings strategies that may not fit for everyone but is bound to have at least one thing you can implement in your own life. By looking at the biggest areas we spend it can be easy to cut out a portion of those costs as they are such large amounts we don't always fight to save a relatively 'little bit' but they add up across the board. Now we have the motivation and a course of action, what's next?

# data[].attributes.attachment_link.title
How to Save Money in Canada: 27 Practical Ways

# data[].attributes.body
So you have all this money that you've saved up, where do you put it? This video provides a few options and recommendations on where to put your saved up cash so that you can keep it as accessible as possible well still being able to earn more on it passively. Who wouldn't want your money to make money? Keeping it accessible as well means that you do not get stuck not able to access your emergency fund in an emergency. This is a nice wrap up of the savings plan that should be effective in helping you build at least a little bit of money for a rainy day.

# data[].attributes.attachment_link.title
The Best Place To Put Your Savings In Canada | Emergency Fund Explained

# data[].attributes.body
This article touches on automating your savings by sending money on yourself straight from your paycheques to a high interest savings account such as a Registered Retirement Savings Plan (RRSP) or a Tax-Free Savings account (TFSA). This is bringing us back to the idea of ‘set it and forget it’ by allowing money to automatically be saved for you. It is also recommended in this article to diversify your savings. This way even if you do dip into your savings, it may only be for one small piece of everything well the rest of your portfolio goes untouched although any savings is good savings.

# data[].attributes.attachment_link.readable_text
As we know, the pandemic has caused financial hardship for many people. According to one poll, for example, two thirds of respondents were concerned they would not recover financially from the pandemic.

But it's precisely in difficult periods that it becomes even more important to be aware of what we're spending and to set away funds for the future.

If you are among those Canadians who are having trouble saving-either because of ingrained habits or circumstances-there are still ways to get your spending on track.

Here's how to sow the seeds for good savings habits that can set you on a solid financial footing for what we hope will soon be a pandemic-free future.

1. TRACK YOUR SPENDING

Most experts agree that the best way to get started on any savings plan is to track your monthly spending. As CPA David Trahair, a financial trainer and author of several books, including The Procrastinator's Guide to Retirement, points out, "Every person's personal financial situation is as individual as their fingerprints-and your fingerprint is your historical spending."

While tracking your spending is important-and many banks make the process easy by giving you free access to proprietary and secure budgeting and spending tools-many people just don't do it. "Unfortunately, these are often people who spend more than they make," says Trahair.

2. PAY OFF YOUR CREDIT CARDS

Even if you don't track your expenses, you should know if you can pay off your credit cards every month. If you cannot pay the balance, you are a revolver-i.e., you carry a balance, paying high interest along the way.

According to Trahair, this is financial folly. "If you owe $20,000 to a bank and it is charging you 20 per cent interest per year, you are adding $4,000 in non-deductible interest to your debt each year."

If you are a revolver, Trahair says it does not make sense to invest in a tax-free savings account (TFSA) where you might make two per cent interest. "Mathematically, it makes far more sense to pay off your credit card debt," he says.

3. AUTOMATE YOUR SAVING

Probably the easiest way to save when you're not a saver is to regularly pay yourself first by having a certain amount transferred from each paycheque to a Registered Retirement Savings Plan (RRSP) or a TFSA at a brokerage or other financial institution, says Trahair. "That way, you won't even miss the money."

CPA Stan Tepner, a portfolio manager at CIBC Wood Gundy, adds that if the money is transferred into a personally held RRSP, you can apply to the CRA and receive authorization for your employer to reduce your tax deductions at source. "That way, you will end up with a bigger net paycheque, rather than having to wait for a tax refund later."

Tepner adds that some workplaces allow you to have a portion of your salary automatically invested in a group RRSP, group TFSA or share purchase plan. "The group RRSP programs automatically reduce taxes withheld at source, without an application to the CRA," he says. "And the other two programs encourage automatic savings from after-tax earnings."

4. CONSIDER YOUR TIME HORIZON

Knowing what you are ultimately saving for-and whether your goal is 50 years or 10 years away-makes a huge difference in the savings strategies you should adopt.

"If you're building a nest egg for retirement in 50 years, you can afford the risk of investing more heavily in the stock market," says Trahair. "But, if you are saving for a down payment on a house, it's better to opt for GICs or similar safe products. You might make only one or two per cent, but you won't be running the risk of losing 50 per cent or even more of your money right before you need it."

5. DO A FINANCIAL CLEANSE

Just as a detox cleanse aims to cut out the harmful items in your diet, a financial cleanse eliminates "toxic" spending-spending that one article calls "emotionally charged, wasteful or just mindless."

An important part of the cleanse involves going on a spending fast-i.e., putting a stop to any purchases that aren't truly needed. "For example, you might have a weakness for shoes or athletic gear," says Tepner. "With fasting, you just try to stop spending on that item for a certain time to see if you can live without it."

6. FIND CREATIVE WAYS TO CUT COSTS

In addition to cutting some expenses completely, you can simply pay less for many items, says Tepner. "There are plenty of examples-making your own lunch to using coupons to cancelling memberships you don't use," he says. You can also use Flipp, an app that houses flyers and catalogues from many retailers and allows people to easily search and price match.

There are ways to save on seasonal spending also. As CPA Bill Stephenson, a sole practitioner and volunteer with CPA Canada's financial literacy program, points out in a blog, you can start a gift exchange with family and friends and put a dollar limit on the gift. In some cases, too, you can even go gift-free. For example, when possible, you can encourage loved ones to volunteer at a local food bank or take the kids skating at a public park. "That good feeling of being with your family and friends is often the best gift of all," says Stephenson.

7. BALANCE REPAYMENT WITH SAVING

While Trahair is a big proponent of paying down debt, he recognizes that if your goal is retirement, you also need to consider the savings side. "If you just focus on reducing your mortgage to zero by retirement, you might run into cash flow difficulties if you haven't saved enough."

The solution, as he sees it, is to keep everything in balance. "Ideally, you should pay off the mortgage before retirement, but you should also make sure to you have saved enough so that you can afford to pay your living costs."

8. BE YOUR OWN BEST SAVINGS FRIEND

In the end, building healthy saving habits is all about awareness: you have to know what you are spending-and why-before you can uncover opportunities to save. But once you kickstart the process, you just might find you enjoy it.

As Trahair puts it, "You'll reap the rewards in the form of lower credit card bills and higher savings balances. Better still, you'll lose far less sleep worrying about your future finances."

BECOME FINANCIALLY SAVVY

CPA Canada has a wealth of resources-from guides to information sheets to workshops-that can help both individuals and couples get a better grasp on their money.

Think it's too late to start saving for retirement? Find practical solutions in The Procrastinator's Guide to Retirement.

# data[].attributes.attachment_link.title
Struggling to save? These pro tips can set you on the right track

# data[].attributes.attachment_link.description
As we know, the pandemic has caused financial hardship for many people. According to one poll, for example, two thirds of respondents were concerned they would not recover financially from the pandemic. But it's precisely in difficult periods that it becomes even more important to be aware of what we're spending and to set away funds for the future.

# data[].attributes.body
This is the government of Canada's recommendations on how to create a budget and what to worry when doing so. I wanted to include this website as it has many helpful links to tools and advice for aiding in your savings journey. Between the many different calculators (goal calculator, expense calculator) you can forecast what you may need to be putting away. Along with the calculators are a few different plans that have been laid out for you as well. By far the most useful for this topic is the budget planner. This helps you create your own quick budget that you can then implement for yourself.

# data[].attributes.attachment_link.readable_text
Why make a budget

A budget is a plan that helps you manage your money. It helps you figure out how much money you get, spend and save. Making a budget can help you balance your income with your savings and expenses. It guides your spending to help you reach your financial goals.

A budget is especially important if you:

don't know where your money is going

don't save regularly

have problems paying off your debts

feel overwhelmed by your finances

feel like you're not in control of your finances

want to make the most of your money

are planning for a major purchase or a life event

Making a budget can help you:

set spending limits

find ways to pay down your debts

reduce costs and save more

live within your means

reduce financial stress

have more money for things that are important to you

feel in control of your finances

What to consider before you make a budget

Take these simple steps before you make your budget.

Think about your financial goals

Identify your short-term and long-term goals. Make saving for those goals part of your budget.

For example, goals may be:

Short-term goals:

paying off your credit card

reducing your weekly expenses

starting to build an emergency fund

Long-term goals:

paying off all of your debts

saving to buy a home or a car

saving to have children, to go to school or to retire

To deal with unexpected situations, create an emergency fund. Your emergency fund should provide you with enough money to cover your living expenses for 3 to 6 months. These amounts can sometimes seem out of reach. That is why you should start by saving a small amount on a regular basis.

Having an emergency fund will help you reduce financial stress and avoid getting trapped in a debt cycle.
Learn how to set up an emergency fund.
Know where your money is going

Tracking your money will help you figure out what comes in and what goes out of your pocket. Every dollar you spend affects your overall budget.

For example, if you spend $3 a day on coffee, it will cost you more than $1,000 a year.

To keep track of where your money is going, take note of what you spend.

Try this exercise for 1 or 2 months:

keep track of everything you buy, from groceries to a daily cup of coffee

keep track of bills you pay during this period, for example your telephone or internet bill

try dividing your expenses into 2 categories: "needs" and "wants"

Small changes to spending habits can have a major impact on your budget and your ability to save.
Find ways to save money before shopping.
Evaluate your needs and wants

Knowing the difference between your needs and your wants is key to making a smart budget.

A "need" is something that is necessary, required or essential. For example, a roof over your head, clothing, food, or medication.

A "want" is something that you'd like, but don't necessarily need. For example, meals at a restaurant, a trip, a gym membership, or designer shoes.

Needs and wants aren't the same for everyone. One person's "want" may be another person's "need". For example, if you live near a bus route, a car may be a want rather than a need. However, if you don't have access to public transit and can't move around otherwise, you may need a car.

Your needs and wants may also change over time. For example, a large house may be a need while you're raising a family. However, a condo or a smaller home may be what you need when your children move out.

Once you've figured out your needs and wants, you're ready to make your budget.

How to make a budget

In order to make a useful budget you need an effective tool that is easy to use.

The Budget Planner is a tool that allows you to create a personalized budget and save it online. It gives you tips and guidelines and helps you figure out your next steps with suggestions. It also creates charts that show you where your money is going. You also have the option to compare your budget with those of other Canadians like you.
Use the Budget Planner to make a budget.
Steps to make a budget

Take the following simple steps to make your budget.

Step 1: List your income, savings and expenses

take your recent pay stubs, bills, and account statements

enter the amount of income, savings and expenses into each category of the Budget Planner

if you can't find a field for a specific item, you can always add and name your own items

When you're done, review the amounts to make sure you didn't forget anything. These items should represent your current situation.

As you're entering data, the tool will give you tips to help you save more and/or spend less. Consider those tips to balance your budget.

When you're done creating your budget, save it online so you can return to it anywhere, at any time.

Step 2: Review your results

The results section provides you with average guidelines. These guidelines tell you what Canadians usually spend or save for each budget category, for example, food, housing, clothing, insurance.

Look at the different alerts you receive for each category:

green thumbs up: this amount is within the average range

yellow warning sign: this amount is slightly above the average range

red hand sign: this amount is above the average range

These alerts will help you determine where you should focus your attention or try to reduce costs. Everyone's situation is different and while the guidelines can't apply to everybody, they provide a good starting point.

Review your results graphics, they give you a clear visual of your overall budget. You'll see a graphic that shows you how your budget compares to those of other Canadians in similar situations. It's valuable to compare your financial habits with people with similar age, income, housing and family situation.

Step 3: Review your next steps

In the next steps section, the tool gives you personalized suggestions. These suggestions are based on your situation and what you have entered in your budget. They help you figure out your next steps whether you have money left or are overspending.

Read them carefully and follow the links to useful educational tools and content to improve your budget.

Tips to help you stick to your budget

Now that you have a budget, try to stick to it and improve it as you go.

To help you with this task, try the following:

keep all your receipts and bills

limit your spending as much as possible to what's in your budget

update your budget with any changes, for example, a pay raise or a bill increase

compare your budget to what you actually spend at the end of each month

Evaluate your budget from time to time. If your actual spending often varies from your budget, adjust your figures to make it more realistic.

When comparing your budget to your actual spending, ask yourself the following questions:

are there large differences between your actual spending and your budget

which categories have the largest differences

are differences due to an unusual situation or is this likely to happen each month

can you save enough money to reach your financial goals or pay off your debts

Continue with this exercise each month. You can set a reminder or book time in your calendar to review your budget regularly. If you make it a habit, you are more likely to stay on track.

Related links

# data[].attributes.attachment_link.keywords[]
budget; managing your money; financial goals; tracking my money; my financial needs; my financial wants; tracking your money; your financial needs and your wants; budget planner; personal budget; budget maker

# data[].attributes.attachment_link.description
Tips on how to make and stick to a budget. Consider your needs, wants, spending habits and financial goals.

# data[].attributes.body
This image is more of a visual breakdown of the previously touched on 50/20/30 rule. It shows what some of the expenses that can be included in each section are

# data[].attributes.body
This image is a visual breakdown of a budget represented with some real numbers and scenarios to give you a look at the things we have talked about being put into practice.

# data[].attributes.headline
What did you learn about your topic that surprised you the most?

# data[].attributes.subject
What did you learn about your topic that surprised you the most?

# data[].attributes.body
The most surprising part of my research was just how much money accumulates over time when you put only a little bit a way. Obviously I assumed that it would be a large sum but only a couple hundred from each of your pays could become a million by the time you retire. Who couldn't use an extra million?

# data[].attributes.headline
Provide a real life example of how this topic is relevant or interesting to you.

# data[].attributes.subject
Provide a real life example of how this topic is relevant or interesting to you.

# data[].attributes.body
This topic is interesting to me as I am about to finish my degree in accounting and am looking to possibly continue my studies in the finance field as well to get a view of both sides. Well doing my research I found many websites and videos that only made me more interested in going that route. I enjoyed this project and my topic.

# data[].attributes.headline
If you could pass on your knowledge to a family member or friend, what do you think is the most important thing to pass on?

# data[].attributes.subject
If you could pass on your knowledge to a family member or friend, what do you think is the most important thing to pass on?

# data[].attributes.body
I believe the most important thing to pass on from this topic is that you should always give yourself money before you spend on anything else. You may always spend if you see a lot of money in your account so putting that money somewhere safe is key to creating that safety net.

# data[].attributes.body
This is another article that is on budgeting and is a helpful tool for keeping yourself motivated well putting money away for a long period of time. By using the 50/20/30 rule you are able to put most of your money away well still making sure you have enough for yourself and to keep your wants fulfilled so that you do not lose motivation to save. It is for that reason that I wanted to include this article as well because the initial drive of saving every penny can wear off over time and we can't lose the hard learned habits with them.

# data[].attributes.attachment_link.title
The 50/30/20 Budget Rule Explained With Examples

# data[].attributes.attachment_link.description
Learn about Elizabeth Warren’s 50/20/30 budget rule; a simple and effective plan for personal money management and wealth creation.

# data[].attributes.body
This is a link directly to the budget planner that can be found within the previous websites reading. You provide the planner with some basic information on yourself and some things about your life along with your income and expenses. After that you are provided with an outline for your budget that could be the framework for a more specific budget or can be used on its own just like that. Also provided are breakdowns/graphs of how your money is spent and some next steps or suggestions on what to cut back on. Overall this is an incredibly useful tool.

# data[].attributes.attachment_link.readable_text
The Budget Planner helps you create a customized budget in 3 simple steps. Gather information regarding your income and expenses and get started! If you don't have all your information, you can always save and continue later.

By using this tool and its content, you are agreeing to these terms of use.

Save your budget and continue later via a unique link

Personalize your budget to meet your needs

Make budgeting easier with tips, guidelines and alerts

See charts and comparison to your average Canadian

Get next steps with suggestions and useful links

Earn badges and share your success story

Download a spreadsheet

* The Budget Planner has been developed by FCAC and incorporates in part the Budget Calculator Spreadsheet under license from Credit Counselling Society. All rights reserved.

# data[].attributes.attachment_link.keywords[]
budget planning; savings; personal finance; budgets; financial management; banking; personal income

# data[].attributes.attachment_link.description
Create your budget and receive personalized tips and suggestions to improve your financial situation.