With unaffordable housing and the cost of groceries increasing daily, the cost of living in Canada is coming in at a high price tag. Today, many Canadians are having to make significant adjustments to their financial budgets, cutting out modest indulgences and focusing solely on covering their monthly financial needs. With rent or mortgage payments, food expenses, bills, and transportation costs stretching pocketbooks – money has increasingly become a top concern for Canadians. As economic insecurity becomes a growing trend in households nationwide, we’re taking a deeper dive into the four questions keeping Canadians up at night and potential solutions to help you feel more secure about your financial future.
- How do I pay off my looming debt?
Are you currently in the red and trying to get your balance back into the black? Do you find that your monthly payments don’t make a dent in tackling your debt problem? You’re not alone. For young Canadians, paying down high-interest financial debt can feel like a tall order – because even after you’ve made a payment, the debt never seems to vanish. One popular approach to help Canadians tackle their debt is implementing the debt avalanche method. When applying this debt repayment method, you should focus on paying down the credit card or debt with the highest interest first while making minimum payments on the rest of your debt. By implementing this strategy, you’ll be able to shave off years of interest in a shorter timeframe and be one step closer to crossing one debt off your list! If this method is difficult to manage, we’ve outlined additional options for managing your debt in the article 5 Ways to Manage Your Debt Problem.
- Is home ownership even a possibility for me in this housing crisis?
Whether you’re in a metropolitan city or a smaller town, many young Canadians are being confronted with the high cost of homeownership, which only continues to climb. From bidding wars to limited housing availability, the road to homeownership seems like a journey with no destination for many hoping to enter the housing market.
So how do you combat the fear of your homeownership dreams growing farther away? Well, before jumping the gun and applying for a mortgage without sufficient financial knowledge or funds, make sure to speak with a financial advisor at your financial institution. Various financial institutions, including credit unions, work with their members to build customized financial plans and solutions based on their income and budget to help Canadians stay confident in their financial futures and realize their homeownership dreams. For instance, Innovation Federal Credit Union offers prospective homeowners the opportunity to take advantage of the Fresh Start Mortgage. So, whether you are self-employed, new to Canada, or have been denied a mortgage by a bank due to a lower credit score, Innovation’s Fresh Start Mortgage could be the answer you have been looking for. So don’t let homeownership worries get you down, explore the different mortgage solutions being offered by credit unions and other financial institutions, and take the time to speak with an advisor to build your roadmap to becoming a homeowner.
- Do I really have enough savings?
In today’s precarious economic climate, Canadians are increasingly conscious of their finances and are left wondering whether they have enough money allotted to handle unanticipated emergencies or, better yet, sustain their standard of living. But the question becomes, how much savings is enough?
Most of us have heard of the 50/30/20 rule, which recommends 50% of Canadians’ income should cover the essentials such as housing, food, and utilities, 30% for non-essentials, and lastly, 20% towards savings or debt repayment if necessary. But is committing to this level of savings feasible when you are living paycheque to paycheque? What if you are concerned about losing your job?
Well, there are a few answers to this all-important question. First off…just start saving what you can! Whether it’s $50 a week, $200 bi-weekly, $1,000 a month, or anything in-between, start now by setting up an automatic transfer directly to your savings account with an amount you can afford. After all, small financial changes today could mean significant savings for you tomorrow. Whether you are saving for a rainy day, a car, or your first home, there are many high-interest savings accounts and investment options that you can utilize to help you along your savings journey. If you’re feeling overwhelmed and are unsure how to develop a savings strategy, consider speaking with a financial advisor at your local credit union to help you determine a personalized savings plan based on your risk, income, and your short-term and long-term goals. Ultimately, by being proactive and sticking to a savings plan, you’ll be able to achieve your goals and set yourself up with a little financial cushion to navigate any unexpected financial obstacles that come your way.
- Should I save for my retirement now?
When is the right time to start saving for retirement, and how much should you put away? Same as above, the perfect time to start saving is right now. While retirement may be decades away, contributing small increments towards your Registered Retirement Savings Plan (RRSP) at an early age will help you slowly build your retirement piggy bank. Plus, by jumping on the retirement savings bandwagon early on, you’ll be able to take advantage of compound interest which means even more cash in your retirement pocketbook.
Not sure how to jumpstart your retirement savings journey? Speaking with a financial advisor will allow you to obtain a holistic picture of your current financial holdings so that you can develop the best savings strategy to get your retirement account up and running. If you’re 25 and thinking about your retirement savings, you’re already a step ahead, and if you’re in your 40s and starting your RRSP journey, you still have time to catch up on your contributions and retire comfortably. So, whether you contribute to an RRSP, take advantage of joint contributions to your Canadian Pension Plan alongside your employer, or add savings to your TFSA, there are various ways to fund your retirement. Simply put, starting now is better than not starting at all.
Sleep more soundly with the help of a Credit Union
From far and wide, Canadians from coast-to-coast share one universal concern: their financial futures. From how to pay down debt and save for a home, to saving for retirement or building an adequate savings fund, Canadians are struggling with these four pressing financial questions. Canada’s credit unions are a great financial option for all your banking needs, and can provide personalized solutions to help you achieve a brighter financial future, so you can rest your head at night with ease. To find your nearest credit union, click here.