Financial Literacy

When planning for your financial goals whether it be something small like saving for a new computer or saving up to bu a new car Three things can help you identify you goals and how to obtain them.

• Prioritize what is important to you
• Write down your goals - this can help you keep track and makes them more "real"
• Checking in regular to see how you are progressing and adjust when necessary

Using the S.M.A.R.T. goals is a great way to help you understand your goals and make sure the are attainable

• Specific - Have well defined and focused goals.
• Measurable -Make sure that you can track how you are saving to be able to measure you achievements
• Achievable - Make sure your goals are within you ability. Trying to save one million dollars by the time you are 25 is not a realistic goal for most people. You need to consider your position and situation when identifying your goals.
• Realistic - You need to consider current and expected conditions. Look at both your controlled situation such as your income and expenses but also look at other factors, such as inflation and market trends.
• Timely - Set a timeline for your achievements. It can be based on your comfort level and income.

Financial goals don't have to be necessarily about saving money on top of everything else we spend our money on. They can also be something as simple as not eating out as much, or making your own coffee at home, instead of buying it everyday.You can also break down you goals into small steps.

Example: If you want to save to take a trip to Europe that will cost you $7000, where can you cut items to save that money?

• Cut out buying lunches out from 5 times a week to once a week. At the cost of $10 per lunch out - $4 per lunch from home = $6 saving per meal x 4 =$24 per week or $1248 per year
• Cut restaurants meals down to eating out twice per month: Cost of meal out average of $50 per visit. If you went out 5 times a month that is a savings of $150 per month or  $1800 per year

With two simple adjustments in our spend we can save $3048 per year.

By using SMARTer goals by breaking down you expenses and seeing where you are spending your money you can easily identify where you can easily save money without earning more money.

You can use the FCAC Financial Goal Calculator to help you plan how long it will take to attain your savings goal.

Saving money can sometime feel daunting and under rated.

But there are good reasons to save:

• feel more secure and in control
• be prepared for emergencies
• reduces stress and conflict
• afford major purchases
• pay off debt and avoid new debt
• retire comfortably

Reason and excuses people do not save

• the y don't make enough money. Sometime we have to address this in more productive ways as looking for a  better job, investing in education to obtain such jobs or taking on extra hours.
• I want to enjoy myself while I am young
• Saving and investing is too complicating - get help form an expert
• tying up money in saving limits my options
• I save so little that it does make a difference
• I don't need to save because I am expecting an inheritance - never depend on other to ensure your future, you never know what can happen
• I can sell my thing if I need money

There are Four basic steps to savings

1. Sett up an emergency fund (attempt to have 6 month worth of expenses on hand for emergencies)
2. Pay yourself first
3. Make saving automatic (Example: every paycheck $100 goes directly into the saving account)
4. Grow your Savings ( Look into investment options such as GICs, Mutual Funds or Stocks and Bonds)

Investing with registered tax plans

• Tax-Free Savings Accounts (TSFAs) - earn income from investments without paying taxes on income. Contribute up to $6500 a year ($7000 in 2024) plus similar eligible years
• Registered Retirement Savings Plans (RRSPs) - Defer paying income tax until retirement
• First Home Savings Account (FHSA) - Contribution are tax deductible, withdrawals are tax free contribute up to $8000 per year to a maximum of $40000