“A term used to describe the state of one’s personal financial situation. There are many dimensions to financial health, including the amount of savings you have, how much you are setting away for retirement and how much of your income you are spending on fixed or non-discretionary expenses”
How financially fit are you?
These days, many people spend time focusing our diets and our exercise. But that same attention doesn’t always follow with our financial health. According to Statistics Canada, by 2031, average life expectancy in Canada is projected to rise to 81.9 for males and 86.0 for females). For many of us, our long-term financial wellbeing is being neglected.
What we know
The Financial Planning Standards Council of Canada tells us:
- Only 30% of Canadians follow a monthly budget.
- Only 40% of us have a formal financial plan in place.
The CIBC Financial Health Poll told us
- 37% of those who retired and then returned to work did so because they didn’t have enough money.
- 60% say that in hindsight they would have started investing earlier and they would have saved more.
The future starts today
More than just having enough money, our level of financial fitness reflects our ability to bring our current and future needs into balance. To have a balanced financial plan, you must set some realistic goals. Just as successful athletes have specific goals towards which they consistently work, the key to financial fitness is to set achievable goals and consistently work towards them. Here are eight tips to financial success from Financial Planning Expert and Author Debby Fowles:
- Spend Less Than You Earn – It sounds simple, but many people struggle with this first basic rule. No matter how much or how little you’re paid, you’ll never get ahead if you spend more than you earn.
- Stick to a Budget – How can you know where your money is going if you don’t budget? How can you set spending and saving goals if you don’t know where your money is going? You need a budget, no matter how much money you make.
- Pay Off Credit Card Debt – Those little pieces of plastic are so easy to use, and it’s so easy to forget that it’s real money we’re dealing with when we whip them out to pay for a purchase, large or small. Despite our good resolves to pay off the balance quickly, the reality is that we often don’t, and end up paying far more for things than we would have paid if we had used cash.
- Contribute to a Retirement Plan – The UBC Pension Plan is an important part of your overall compensation and plays an important role in your future. The sooner you join the Plan, the greater your retirement income will be. Learn more about the UBC Staff Pension Plan and the Faculty Pension Plan.
- Have a Savings Plan – Resolve to set aside a minimum of 5% to 10% of your salary for savings before you start paying your bills. Better yet, have the money automatically deducted from your paycheck and deposited into a separate account. Speak to a Financial Counsellor free of charge through your Employee and Family Assistance Program (EFAP) for help with this. Click here for more information, or call 1-800-663-1142.
- Maximize Your Employment Benefits – Make sure you’re maximizing your benefits and taking advantage of the benefits that can save you money by reducing taxes or out-of-pocket expenses. For more information about your benefits at UBC click here
- Update Your Will – 71% of Canadians don’t have a will. If you have dependents, no matter how little or how much you own, you need a will. Protect your loved ones. Write a will.
- Keep Good Records – If you don’t keep good records, you’re probably not claiming all your allowable income tax deductions and credits. Set up a system now and use it all year. It’s much easier than scrambling to find everything at tax time, only to miss items that might have saved you money. You can take a free e-Learning course titled Taking Control of your Moneythrough your Employee and Family Assistance Program (EFAP) to help.
Your Financial Fitness starts here! Creating a plan to manage your money is a sound way to achieve the goals you want in life, whether it be a house, travel, education or retirement. Join money coaching, entrepreneurship, small business financing and nonprofit management expert Melanie Buffel on April 24th 2014 @ 12-1pm for a ‘Managing your Money’ workshop to help you plan for your future by providing tips on how to create a budget, decrease debt, and increase your savings. For more information or to register, click here.