Financial resolutions for the New Year

By Georgie Alford
– January 2022 – 

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There is no denying that 2021 was another tough year financially. Statistics Canada highlights that while economic activity has grown in the past year, it still remains below pre-pandemic levels. The slow growth rates have continued to affect business owners and with the surge of Omicron cases, the future once again looks uncertain. 

To adjust for the continuously changing circumstances, many of us have had to learn new skills. One such person is Mike Silva – a flight attendant turned financial advisor. Silva now acts as a financial ambassador for St. James Town, liaising between different services connected with The Corner. 

In the wake of the New Year, clear and effective financial planning is more important than ever. Here are Silva’s Top Tips on how to get ahead in 2022:

1. Have a plan.
As we are now well aware, emergencies happen and many people don’t have an emergency fund. Start to think about how you divide up your money and allocate your income into different “pots.” Silva recommends having an emergency fund that covers around six months worth of income. 

2. Pay yourself first. 
This is a financial planning concept where instead of paying your expenses first, you develop the habit of putting 5-10% of your income into investments or savings. You can think of this as a bill for yourself – one which you have to keep up each month. It is great to start this habit early on in your earning career – the more you are able to accumulate, the stronger your emergency fund will be.

3. Understand your accounts.
The numerous kinds of bank accounts can be confusing. If you know how to maximize these accounts, it can be very beneficial to your savings and investment portfolio. Advisors from the bank can help you to understand the differences between various accounts, and crucially, their rules and regulations. There is often a lot of confusion about the TFSA – tax free savings account. This name is misleading as it is actually an investment account with various penalties that are important to be aware of. 

4. Learn financial concepts.
For many people, financial concepts can be a stumbling block when looking to make financial decisions. Concepts such as compound interest, liquidity, or inflation can be researched for free online. Some websites even offer free financial planning courses which will teach you key concepts and best practices. McGill University offers a free online Personal Finance Essentials course which covers budgeting, borrowing and real estate. The course is only a few hours long but could help boost your knowledge. 

5. Talk to a financial advisor.
While banks are places many people think of first when trying to seek financial advice, often they do not have the best interest of the customer. Unlike what most people think, financial advisors don’t charge much and often offer advice for free. Financial planning companies try to build a trusting relationship and make recommendations that will benefit their clients. However, it is always important to ask questions regarding their relationship to the services they are selling – do they have a stake in the profits as well?

6. Taxes, Taxes, Taxes.
No one enjoys filling out tax forms, but they are not as complicated as they may seem, especially with the help of step-by-step guidelines. The Government of Canada website offers a range of resources to aid the tax form process. Some of these provide you with the statement and all you have to do is plug in the numbers. Easy!

2022-01-10T19:44:30+00:00January 10th, 2022|Categories: Community, covid-19, education, employment, General|0 Comments

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