The ever-changing world of managing your personal finances can be both confusing and complicated at times – this particularly applies to recent university grads making their first attempt at planning out their future.
To be fair, many millennials haven’t received much financial education, so you may be missing some key money management techniques and wise investment opportunities. In addition, most millennials are facing ever-increasing living expenses and lingering student debt, so it’s no wonder many are finding it so hard to save. So, to provide some insight, we’ve compiled a few money management and saving tips sure to help you better handle your personal finances and embrace a prosperous future.
1. Budget to Increase Your Savings Potential
When putting together your monthly budget, it might be a good idea to set aside a certain percentage of your income to put into savings and or investment opportunities – even if it’s a small contribution. After you’ve decided how much you can afford to put aside, your next decision should be where can you invest your money to achieve the best possible ROI.
2. TFSA or RRSP?
There are two very good options worth looking into when establishing a savings plan. The first option is the Tax-Free Savings Account (TFSA); an account you can allocate funds to often as you wish and gain a percentage of interest on your investment, over time and tax-free! You can even set it up to automatically transfer funds between your checking and savings based off your pay schedule.
The second option is contributing to a Registered Retirement Savings Plan (RRSP), in which you may put a percentage of your income towards a retirement fund that gains interest over time. The great thing about an RRSP is that many employers match the contributions you make into it. That’s right, free money from your employer that basically doubles the funds you’re already contributing – not to mention RRSP’s lower your taxable income. With TurboTax Live you have experts that can help walk you and guide you through your tax situation so you get your max for you tax!
3. Diversify Your Investments
For younger investors with limited funds, it may be a good idea to do some research on mutual funds. Mutual funds are essentially a ‘mixed bag’ of investments, where several investors pool their money together, and a mutual fund manager makes the educated decision as to where it’s all invested. This helps you to build your investment portfolio through someone who already knows the ropes and can wisely invest your money, netting you a healthy return over time.
But most importantly when delving into the complicated realm of personal finances it’s best to do your research before making any definite investment decisions. Speak to investment advisors and or colleagues that have relatable experience. You may also speak to your bank associates and determine what options you have and what will be the best fit for your lifestyle and level of income.
All these tips can help you budget out a sound financial plan that will help secure your future finances and set you up for continued success!