10 Tips To Weather Any Economic Storm

By Jennifer Clyne

In an economy of unknowns, remember to stick to the basics.

1.    Don’t spend more than you make.
It seems simple, but according to a 2015 Financial Post article, 71% of Canadian families carry some form of debt. Try Gail Vaz-Oxlade’s interactive budget worksheet to stay on track. 

2.    Pay yourself first.
Save a portion of your income first before anything else. Personally, every single pay cheque I contribute between 20-30% to my investments. It is amazing how fast your savings and investments will grow by consistently contributing to them.
3.    Have an emergency fund.
Many people believe that your emergency fund just needs to sit in your savings account earning barely any interest. In fact, you can have your emergency fund invested. Just make sure the money is in liquid products, and understand the volatility of the securities you are invested in. 

4.    Manage liabilities and expenses.
Understand what your needs are versus what your wants are. 

The ability to discipline yourself to delay gratification in the short term in order to enjoy greater rewards in the long term, is the indispensable prerequisite for success.
— Brian Tracy

5.    Build up your savings.

Compound interest is the eighth wonder of the world. He who understands it, earns it…he who doesn’t…pays it.
— Albert Einstein

6.    Reduce debt.
Using the cash jar/envelope method is a great tool to help reduce debt. It accounts for every dollar in and out and makes sure you are putting money towards your goal, whether that goal is to pay off debt, or to put towards saving etc.

7.    Have a financial plan.
Many people confuse a financial planner with an investment advisor. Learn the difference here. We believe a financial planner is the quarterback in coordinating all financial aspects of your life. This includes the rate of return you will need to earn on you investments, how much you should save, do you have the right insurance, estate planning and clarifying goals. A financial planner will help you create a plan and an investment advisor will help you achieve it. 

8.    Create good habits.
Create a healthy financial lifestyle. Just like staying active and eating well, it may take months for results to show. But it will be well worth it in the long run. 

9.    Understand your investment plan, and make sure it has a solid process

If you can’t explain it simply, you don’t understand it well enough.
— Albert Einstein

10.    Keep it simple, and don’t panic.
If you are spending less than you make, building your savings cushion and have a good investment plan, you probably won’t even experience panic. If you are doing these simple things and still need some help relaxing, try listening to Coldplay’s “Don’t Panic”.

Do yourself a favour and take financial stress out of your life. If you need some guidance give us a call at 1-866-960-1025.