How to Get Your Finances in Order


The first step in making a money switch is to figure out your income and expenses, especially if you don’t have a budget and aren’t currently tracking those two things. “I recommend Canadians review their after-tax income, monthly fixed expenses (including rent, mortgage, savings, insurance, healthcare, alimony, property taxes, vacation funds), and voluntary expenses (groceries, clothing, gifts, dining out, entertainment, personal hygiene, travel ) and make sure each category is broken down,” says Kelly Ho, certified financial planner and partner at DLD Financial Group. “It’s important to take stock before trying to do better,” she says, adding that you should start by reviewing your bank and credit card statements for the past two or three months. This part is important because you cannot improve your finances without fully knowing your financial situation. “Clarity brings comfort,” says Leong. “You can’t make your money work for you if you don’t look at how much you’re making, where your money is going, and what you can do to make a positive impact.”

You can also take this opportunity to look at your discretionary spending – the ones that may vary from month to month – to identify spending patterns. Then, consider whether your budget and spending accurately reflects your priorities and goals. “What do you want to do with your money?” Moorhouse asks. “That’s the more fun part — going deep and figuring out what you want in life and for your future.” This could mean setting aside a portion of each paycheck for a big trip (now that travel is possible again) or Putting money in a special savings account to shop for clothes without feeling guilty.

As you create or update your budget and track cash flow, you may also find that you actually need to find ways to increase your income, perhaps through a side hustle or a temporary part-time weekend job to pay off debt faster or be able to be to book this girls trip to Mexico. “If you want more than your income allows, you need to make more money,” says Moorhouse.


Once you have a clear picture of your cash flow, you can start making adjustments and improvements. Leong suggests things like canceling any subscriptions you’re not using and redirecting those savings to your emergency fund (more on that later). Adding just $10 or $20 a month to your automatic savings plans can make a difference over time.

Aside from curbing excessive discretionary spending, you can also look at fixed costs like your phone bill and remove any paid features or data plans you’re not using, or see if you can find a better deal from the same or a new provider. That logic makes sense: the more you can reduce your fixed monthly expenses, the more money you have left for other financial goals. You could hire a professional at this stage to help you determine if your financial situation is in line with your goals. “Financial planning isn’t just for the quote-heavy,” says Ho. “It is [about] Gather up the courage to go and talk to someone and actually have a second [and maybe] A third pair of eyes takes a look at your situation and tells you if you are actually okay. An expert can discuss best and worst case scenarios with you and ensure that your current savings rate and investments are actually supporting your goals.”


“Even if it’s a small amount, start investing money in your TFSA or maybe an RRSP for your future,” advises Moorhouse. At the same time, don’t forget to closely review your existing investments and any retirement savings to track their performance, make sure you’re not paying too many fees, and see if you’re on track to reach your long position – Deadlines. “Look at what you’re actually investing in,” says Moorhouse. “If you don’t understand what you’re investing in, then that should be your signal to do some more research.”

There are many different financial products, from stocks to exchange traded funds to guaranteed investment certificates. Not only do you want to know where your money is, you also want to know what the fees are and whether the return was good or not. “If you’re paying 2 percent or more, the fees are too high,” Moorhouse says.


If you’ve been able to reduce your spending or find savings in your budget, now is the perfect time to save some cash for a rainy day. In light of the current global economic climate, you should ensure that you have an emergency fund in place and that you are making regular contributions. Moorhouse recommends setting aside at least three to six months of living expenses in a savings account in case you get laid off or something else happens that negatively impacts your financial situation. “It’s a turning point for most people,” she says. “Then you have a safety net.”

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