November marks Financial Literacy Month in Canada, a time to focus on building financial knowledge and resilience. With inflation and interest rates impacting households nationwide, there’s no better time to sharpen our financial skills and set ourselves up for financial security. A recent Financial IQ Study by World Financial Group, a leading financial services provider, reveals that 58% of Canadian households have scaled back on everyday spending, and a third have dipped into their savings just to cover expenses. These insights reinforce the need for sound financial practices for aspiring and seasoned homeowners. Whether you’re preparing to buy your first home, hoping to secure a comfortable retirement, or looking to grow your investments, these five tips can help you master the financial basics.
1. Know Your Banking Basics
Empower yourself with a solid financial foundation that begins with understanding how different bank accounts work. Most of us rely on a chequing account for day-to-day expenses. In contrast, savings accounts generally offer higher interest rates to grow our money but may have withdrawal limitations. Finding the proper accounts to meet your financial goals is crucial. If you’re unsure about financial literacy, free resources like ABC Life Literacy Canada’s Money Matters program can guide you through the essentials.
2. Plan for a Secure Retirement
Thinking about retirement might seem premature for some, but the earlier you plan, the more secure your future will be. Employer-sponsored retirement plans can be precious, especially those that match contributions. But if you’re self-employed or don’t have access to a workplace plan, setting up an RRSP or TFSA with diversified investments—such as stocks, bonds, or mutual funds—is a great way to prepare. Crafting a retirement budget that tracks income and expenses can also help you stay on target for your financial goals, providing a sense of security about your future.
3. Shop Smart for Mortgage Renewals
With interest rates fluctuating, many homeowners are concerned about mortgage renewals. If your term is ending, take the time to explore options beyond your current lender. While your bank will give you a heads-up 21 days before your term ends, researching other lenders could lead to better rates or more favourable terms. And even if you stay with your lender, sharing these insights may help you negotiate a lower interest rate, especially if other lenders offer competitive deals. This savvy approach to mortgage renewals can make you feel more resourceful and in control of your financial decisions.
4. Leverage Digital Tools as an Entrepreneur
If you’ve ever considered turning a side hustle into a full-time business, you’re not alone. According to the RBC Small Business Poll, nearly half of Canadians consider themselves aspiring entrepreneurs. With digital tools like Shopify for e-commerce, QuickBooks for online accounting, and Google Workspace for cloud-based productivity, launching a business has never been easier. These innovations provide aspiring entrepreneurs affordable ways to get started, manage cash flow, and grow their ventures without needing hefty startup capital.
5. Explore Investing in Partial Shares
If investing in high-value stocks feels out of reach, partial shares might be the answer. These allow you to buy a portion of a stock or an exchange-traded fund (ETF) with a small investment amount, making it accessible to everyone. For instance, if a stock trades at $ 100 per share and you have $ 50, you can buy half a share. This option, available from platforms like TD Direct Investing, lets you start small and build your portfolio gradually based on your available funds. It’s a practical way to gain exposure to the stock market without a substantial initial commitment.
Why Financial Literacy Matters More Than Ever
The world of finance can seem overwhelming, but taking small, consistent steps toward financial literacy is essential, whether navigating mortgage renewals, budgeting for retirement, or beginning to invest. Each action helps safeguard your financial well-being and opens doors to future opportunities.
Are you ready to take control of your financial future this Financial Literacy Month? What steps will you take this November to improve your financial literacy and meet your goals? Let us know in the comments, and share your unique financial goal with us! ⬇️
