Better manage your personal finances

Establish a budget
Build a nest egg
Prioritize the repayment of your debts
Use credit wisely
Borrow to invest, as needed
Save
Plan for a rainy day

Establish a budget

A detailed budget that keeps track of all your income and expenses will help shed some light on your personal finances. It will set apart your fixed expenses (such as lodging, food, and insurance) and your variable expenses (such as entertainment and travel) and help you accurately assess your savings and investment potential. In other words, once you have fulfilled all of your financial obligations, you will know how much money you have to save and invest.

Build a nest egg

Expect the unexpected and keep 3 to 6 months' salary in an easily-convertible investment. You never know!

Prioritize the repayment of your debts

Are you looking for a high quality investment? The best thing you can do is repay your debts. It's no use saving if you earn less interest on your savings than you pay on your debts. It is wise to pay them off as quickly as possible, beginning with the ones that have the highest interest rates, like department store credit cards with rates as high as 29%!

If you should come into some unexpected money (inheritance, lottery winnings or a bonus at work), why not put it towards your mortgage or car loan? Penalty-free accelerated payments are permitted more often than not!

Use credit wisely

Carefully consider your credit needs, your situation and your ability to repay your debts. Our simulators can help you. If you have a credit card, try to pay the total balance before the due date so you won't have to pay any interest. If you contract a loan, don't forget to purchase Desjardins Loan Insurance to make sure you are able to repay your loan if something unexpected occurs. Avoid impulse and hurried purchases, excessive debt and try not to apply for too many credit cards. When it comes to credit, moderation is the key!

Borrow to invest, as needed

You can borrow to spend money but you can also borrow to invest money!

Borrowing is a good way to make an investment that will provide you with a return, such as the purchase of an income-generating property.

Why is it beneficial? Because when a loan is contracted for investment purposes, the interest is tax deductible. The higher your income tax rate, the more you save!

(Note however, that interest resulting from a loan contracted for RRSP contribution purposes is not eligible for this deduction.)

Save

Any financial advisor will tell you that the only way to get rich is to build up your savings. Even if you just put aside small amounts, they will grow with time and the payoff will be big. All it takes is a little discipline. The systematic savings method is the ideal tool for this strategy; it lets you put aside as much as you want and the funds are withdrawn from your account as often as you wish. For example, you may decide to put aside $50 a month or $10 a week. It's simple and above all, it will pay off in the long run!

Plan for a rainy day

First, make sure you have an insurance portfolio with adequate coverage for you and your loved ones. Life and health insurance and property insurance will help you get a good night's sleep!

Also, don't forget to grant power of attorney to someone in case you become incapacitated. This person will then be able to manage your personal affairs if you can no longer do so.

Last, think about writing your will. This way, your estate will be handled according to your instructions.