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506x506_week_4a-eAvoid financial stress: save up for emergencies

You need an emergency fund! Unexpected situations happen. Be prepared, start saving today!

Your goal: save enough money to cover 3-6 months of living expenses. That seems like a lot, so start small and build up.

Many Canadians are unprepared for unexpected expenses:

  • 57% of Canadians said they would use savings to pay for an unexpected expense of $500.*
  • 31% would use savings to pay for an unexpected expense of $5,000.*

By using your savings in case of emergency, you won’t have to resort to expensive credit options.

6 steps to save up for emergencies:

  1. Start with a realistic amount.
  2. Make it a weekly habit.
  3. Cut an expense and save the $.
  4. Automate your savings.
  5. Check your progress regularly.
  6. Increase your weekly savings.

Managing Money and Debt Wisely: It Pays to Know!

Find useful tools and resources at Canada.ca/Financial-Literacy-Month.

506x506_week_3-eShould you switch your mortgage to get a better rate elsewhere?

You may benefit from better rates and lower payments by switching your mortgage, but double-check your mortgage contract first! Switching your mortgage can result in heavy penalties and fees.

Be sure you know all of the penalties and fees before switching your mortgage.

Know your rights and responsibilities:

While your mortgage contract must clearly disclose the cost of breaking it, it is your responsibility to understand your mortgage contract before switching.

Understanding your financial rights and responsibilities means no surprises. Find out more at Canada.ca/it-pays-to-know.

Why do you owe so much interest on your credit card after taking a cash advance? 

Interest charges on your credit card start as soon as you take out a cash advance to make that “must have” purchase; leaving you with a big surprise on your statement 14 days later!

While your credit card agreement must disclose how credit card interest is calculated, it’s your responsibility to read and understand your card agreement before using your credit card for cash advances.

Understanding your financial rights and responsibilities means no surprises. Find out more at Canada.ca/it-pays-to-know.

Should you share your PIN with anyone?

 

Whether it’s your parents, siblings, your spouse, your children, or your best friend, the only person that should know your PIN is you!

While your bank should must protect you from fraud, it is your responsibility to never share your PIN. Understanding your financial rights and responsibilities means no surprises. Find out more at Canada.ca/it-pays-to-know.

506x506_week_2a-eAvoid excessive debt!
Take control of your financial situation: Live within your means
Where to begin? To live within your means, you need to know what you’re spending, have a plan and stick to it!
Step 1: Understand your spending habits
  • Keep track of everything you spend money on every day.
  • Use an expense recording system that works for you (e.g. notebook, mobile app or spreadsheet).
  • After a couple of months, you’ll get a clear picture of how you’re spending your money and where to cut back.
Step 2: Look for savings
  • Avoid impulse spending – always use a list when you shop and stick to it.
  • Plan ahead to reduce your spending (e.g. pack a lunch, or take public transit).
  • Lower your banking fees. – choose a bank account that meets your needs to avoid unnecessary fees.
Step 3: Make a budget and stick to it!
  • Make a budget to map out your income, expenses and savings.
  • Learn the difference between your wants and your needs, and put your needs first.
  • You will face challenges from time to time, but keep at it and you will see the results in no time.
Canadians are saving less and spending more, which is leading to historically high rates of household debt.
  • 42% of 35-44 year olds are struggling to or are not keeping up with bills and financial obligations.*
It’s easy to spend without realizing how the debts are piling up.
6 tips to avoid debt:
  1. Leave your credit cards at home.
  2. Decrease the credit limit on your credit cards – use the Financial Consumer Agency of Canada’s credit card selector tool to find out which credit card is right for you.
  3. Set up automatic bill payments with your financial institution.
  4. Avoid impulse buying. Sleep on it and see if you still want the item the next day.
  5. Avoid “buy now, pay later” offers.
  6. Keep track of your expenses and manage them with a household budget.
Managing Money and Debt Wisely: It Pays to Know!
Find helpful tools and resources at Canada.ca/Financial-Literacy-Month.

managing-money-and-debt-wisely

Most powerful tool in your financial toolkit: a budget

What is a budget?

A budget is a plan that helps you manage your money and avoid getting into financial trouble. It lists all of your income and expenses, and gives you a snapshot of your financial situation.

6 reasons why a budget is your most powerful tool

  1. Allows you to stay on track – a budget helps you track money coming in and going out.
  2. Reduces stress – if you manage money and credit wisely, you can avoid financial surprises.
  3. Helps you identify what is important – a budget helps you distinguish between needs and wants.
  4. Avoid debt – create a budget, you are more likely to follow it and avoid unwanted debt.
  5. Save for tomorrow – a budget helps you plan and save for an important financial goal, like your children’s education or an every day goal like a new appliance.
  6. Be ready for surprise expenses – a budget helps you plan ahead and put money aside for emergencies or unexpected expenses.

Easy steps to make a budget:

To help you get started, use the Financial Consumer Agency of Canada’s budget calculator.

  • Get organized – Record all of your expenses so you know where your money goes and where you can cut spending.
  • Identify your short-term and long-term goals, and build saving for them into your budget.
  • Divide your expenses between things you need (e.g. groceries) and things you want (e.g. tickets to a concert)
  • Make “being debt-free” one of your goals – List all of your debts with interest rates and track your progress in paying them off.
  • Pay more than the minimum payment on bills whenever you can
  • Stick to your plan – Learning to stick to a budget can seem difficult at first, but the more you use your budget, the easier it becomes.

Managing Money and Debt Wisely: It Pays to Know!

Find helpful tools and resources at Canada.ca/Financial-Literacy-Month.