In Lieu of Labour Day, Saving Money and Managing Debt for the Working Albertan

There is no doubt that Alberta is a great place to live. This province offers a wide variety of opportunities for your lifestyle and career, and the people are hard-working, honest, creative and energetic. This Labour Day, we want to celebrate the efforts of these hard-working people.

Navigating the boom and bust economic cycles can, however, be as difficult as navigating the highways on some snowy winter days. With the most recent economic slowdown it is a reminder that we occasionally need to take a step back and look at our financial situations.

With the most recent economic slowdown it is a reminder that we occasionally need to take a step back and look at our financial situations.

Have a plan

Many people will spend more time planning their winter vacation to Mexico or their children’s hockey schedule than their financial planning. The word “budget” conjures up images of coins in a jar, coupon clipping and sharp pencils entering numbers into a spreadsheet. As difficult as it is to admit, overspending is the root cause of almost all financial difficulties.

Keep it simple. The more complex the plan, the less likely it is that you will be able to stick to it. Often consolidating debts into one place can help to simplify things.

• Try using a program like mint.com to track your spending habits.
• Each month you can look back and see where the money is being spent.Seek help if you are overwhelmed. A Financial Planner can help you with a written plan.
• Consider having a cash flow plan put together for you. This plan may be able to show you ways to improve your cash flow to make the most efficient use of your resources. Having too many payments going in different directions can easily lead to inefficiencies and overlooked savings.

Make it automatic

Set up automatic monthly deposits into the following places:

• RRSPs: To ensure that you can retire comfortably
• TFSA: To establish an emergency fund or to save up for a major purchase
• Debt repayment: Having payments automatically withdrawn from your bank account will ensure that payments are made on time, which is important if you want to maintain good credit and pay off your debts quickly

Manage your net Worth

Your net worth can be calculated by adding up the value of your assets (what you own) and subtracting your liabilities (everything that you owe). I recommend that you recalculate your net worth at least every 6 months. Your asset values and debt levels will fluctuate but what really matters is your net worth, it is the only way to truly understand if you are getting ahead or falling behind. You can find many online calculators or excel spreadsheets to help track all of the information.

First Foundation Financial offers Fee Based Financial Planning services to help you meet your financial goals. Contact us today at (780)702-7678 for details.

Seek help if you are overwhelmed. A financial planner can help you with a written plan.