7 ways to take control of your financial future

So, what can you do to keep your finances on track when things cost so much? To help you get started, here are seven things that can help you take control of your financial future.

1. Take stock of your financial situation.

The past few years have proven financially challenging for many Canadians. After a period of skyrocketing interest rates on loans and mortgages, as well as rising costs for groceries and other everyday goods, living in Canada has become more expensive.

At times like these, you may feel the need to change your focus from saving and investing to just making do. But it’s important to conduct regular check-ins on your money, as it helps you determine your priorities and be more aware of where your money is going. Seeking professional advice, from either a planner or debt counsellor, is good, but you can also do it yourself. Check out the MoneySense downloadable (and free) budgeting spreadsheet. When you know where you’re spending your money, you can build financial goals for one year or five years from now, as well as estimate when you can retire.

2. Create a financial plan, including a strategy for reducing debt and increasing saving.

Once you have a clearer picture of your income, expenses, assets and debts, you can make a financial plan. That may include cutting back on some costs that aren’t essential (think streaming services you haven’t used since the lockdowns or negotiating your cell phone bill) and plan for your future goals (retirement, buying a new home).

How’s that emergency savings fund doing? Have you contributed to your tax-free savings account (TFSA)? Have you opened a first home savings account (FHSA)?

Once you’ve contributed to your savings and registered accounts, it’s time to create a timeline, but you also need to plan the steps that will take you there.

Know, though, that everyone’s financial plan is different. Yours should be flexible and be based on your priorities and income. Things happen. Life gets in the way. Be kind to yourself and learn to adjust your plan so that your long-term goals stay on track.

3. Track spending and review your bills.

For the next few months, track your spending and see how it aligns with your new financial plan. A budgeting app can help you budget consistently.

You can also review your past spending using your bank and credit card statements. When your next credit card bill comes in, give it a close read—you might be surprised by what you see. That could include recurring expenses you’ve forgotten about, such as subscriptions you no longer use, or fees you shouldn’t be paying. This is “zombie spending,” and it could be costing you hundreds of dollars per year.

4. Prepare for unexpected expenses.

Life happens—and never at a convenient time. Whether it’s a broken furnace, a dental emergency or a super-sized vet bill, surprise expenses are as unavoidable as they are unpredictable. They can derail your budget, but you can create a bit of a buffer by starting an emergency fund.

Start putting money into a separate savings bucket that’s easily accessible on short notice, such as a no-fee high-interest savings account. To help your emergency fund grow, you could also direct any gifts of money, work bonuses or tax refunds to this account, until you have enough of a cushion to weather life’s mishaps.

5. Assess your insurance needs and increase coverage if needed.

Many Canadians lack adequate insurance coverage. Even if you’re already insured, the rising cost of living means your current coverage amount may no longer be enough. It’s worth looking at the different types of insurance—life, home, auto, disability and critical illness—to see where you need to fill any gaps and help ensure that you and your family are better protected against financial hardship.

6. Take advantage of tax credits, tax deductions and government grants.

There’s a saying about not leaving money on the table. And it’s not just about RRSP (registered retirement savings plan) matching. Every year, the government announces new tax credits, claims and programs. So be sure you’re aware of what is available to help you keep money in your pocket.

For example, just opening an FHSA creates contribution room, even if you don’t put any money in it that year. Do you know the tax differences between a TFSA and an RRSP? A TFSA shelters the growth from taxes, while an RRSP delays the taxes owed on the income until retirement. There are other registered accounts to know about, too, including registered education savings plans (RESPs), registered disability savings plans (RDSPs) and more.

7. Upgrade your financial know-how by learning from reputable sources.

There’s no lack of information about money, investing and finances—from social media to your neighbour, everyone wants to tell you what to do with your money. No wonder WFG reported that over a third (36%) of Canadians feel anxious about their finances, with 37% feeling concerned and 25% feeling strained by their current situation. The key is to know what information you can trust and what to scroll past and ignore. (Check your own financial resilience with WFG’s Financial IQ quiz.)

How? Check credentials, and consider whether the information pertains to you, your situation and where you live. See if the information is balanced and unbiased. If it is emotionally charged or designed to trigger a fear of missing out (FOMO), be very cautious. Also find out how the source of information, i.e. how the author makes money. This pertains to everyone and everything, from an influencer or planner to a financial institution and media website.

You should feel empowered by your decisions to create a better financial present and future, not pressured or out of touch. Keep reading and learning more about money.

More about budgeting and financial planning:

• How has inflation affected Canadians’ finances in recent years?
• Mortgage payments going up at renewal? Here’s what to do
• Year-end tax and financial planning considerations

• The best high-interest savings accounts in Canada