No Notifications
You currently have no notifications
New year, new you? New year, new-and-improved budget planning!
We sat down with Melissa Kreviazuk, Personal Banking Advisor with Cambrian, to review some solid financial fundamentals. If you don’t have set financial goals, start some attainable ones today!
Here are six ways to get the ball rolling:
If you don’t already have a budget, start by investigating where your money is going.
“Budgeting is huge,” says Melissa, “it’s something many people skip, but it makes a significant difference.”
Review your latest three bank statements and categorize your spending patterns. Print them off and use highlighters for a visual.
Who has a printer anymore, you ask? Fair enough! Analyze your statements digitally.
“You’ll quickly see where small cuts, like fewer coffee runs, can make a big difference,” says Melissa.
“Always pay yourself first,” she adds. “Cut that extra spending and move it into savings.”
That way, the money is set aside and less tempting to spend impulsively.
“Categorize your debts by interest rate,” says Melissa. “Then focus on paying off the debt with higher rates first. You can apply extra payments to reduce your debt faster while still paying the minimum of others.”
Melissa encourages members to avoid maxing out credit cards.
“Many people aren’t taught how credit works, so they rack up debt with high interest,” says Melissa. “When possible, we offer consolidation or payoff loans designed to reduce your interest costs.”
“I recently had a member who had taken multiple high interest loans, so we consolidated everything here and saved them about $500 a month, significantly improving their cash flow,” she adds.
“A common mistake I see members make is buying cars that are more expensive than needed. Younger members, especially, will finance a $100,000 truck through a dealership. Dealerships don’t consider debt servicing ratios, so people end up with payments they can’t comfortably afford.”
“When they come to me,” she adds, “I’ll often see if we can bring the loan over to the credit union, where we can sometimes offer better rates and free up cash flow.”
If you’re 18 or older, open a Tax-Free Savings Account and make regular contributions. Top it up at the start of the year. Read more here.
Melissa also regularly reminds members they have the first 60 days of the year to contribute to a Registered Retirement Savings Plan (RRSP) for the previous tax year.
“If you make an RRSP contribution and get a tax refund, you can use that refund to pay down other debts,” says Melissa.
“I encourage you to plan for large annual expenses, like property taxes or home insurance,” says Melissa. “Look at what those costs were last year, expect a slight increase, and budget accordingly by setting money aside each month.”
Look into automatic renewals and cancel any subscriptions you’re not using or don’t need.
“People often don’t realize how many they’re paying for until they review them,” says Melissa.
Switching to a no fee account option, like the unfee at Cambrian, can save a couple hundred dollars a year.
With Cambrian’s unfee, you pay no annual fees when you have a monthly direct deposit set up in your chequing account. That would save you $234 a year!
Let’s get down to business. If you’re new to credit and budgeting, sit down with a PBA to understand the fundamentals, as well as how credit works, how it affects future purchases, and how to build a strong credit score.
Book a meeting today!
We would be happy to discuss your unique situation with you.
Our goal is to make complex topics like this one, simple.
