Saturday, December 19, 2020

5 VERY important financial decisions

Stop procrastinating. You have to take care of your business. When it comes to personal finance, there are important points to keep in mind. Here are 5 better to see NOW.

Make a budget


The budget will always be your best financial ally. It will be your economic GPS for life. With a budget updated regularly, you will not have a bad surprise and will always know if you have the means of your ambitions. It’s not so difficult to establish. Take statements from your bank accounts and credit cards and enter ALL expenses in one column and ALL revenues in another. Obviously, it must balance every month. By visualizing where each of your dollars goes, you will have closer control. Remember, anything that can be measured can improve.

Establish an emergency fund

Establish an emergency fund

Saving 3 to 6 months of savings representing your current expenses will get you out of trouble more than once. To deal with unforeseen situations such as the flowing roof, the muffling silencer or a reduction in your working hours, the emergency fund will be your lifeline. When your savings exceed the threshold, transfer the amounts into TFSA, RRSP or RESP investment accounts.

Financial expenses

Financial expenses

Banks’ recent decision to charge ATMs $ 4 for non-member users, which I would describe as “inconvenience”, should serve as a lesson. Banks always have good reasons to tap into our pockets. It is not uncommon for a negligent individual to pay more than $ 1,000 annually in fees, penalties and interest. To reduce the bill, we can demand a customized package, avoid the windows of external networks, but most importantly, use a virtual bank for your valuable emergency funds. The latter is more respectful to savers and minimize financial costs.

A mandate in case of incapacity

A mandate in case of incapacity

Also known as a “living will”, the mandate of incapacity allows a relative, spouse or a member of your family to take care of your finances if you become temporarily unfit, that is to say, unable to manage properly your business. In case of illness or accident, this document will save you extra trouble. For example, you have a skiing accident like Small Lender and you fall into a coma; by having a mandate, your assets will be managed in your interest by people you trust.

Make a will

It can not be repeated enough: without a will, you leave a lot of troubles to your loved ones. Do not neglect this point. Even if you are not very rich, it’s worth it. A holograph will (written in full by hand) and signed in front of witnesses has a legal value. The best is certainly the notarial will. Nowadays, notaries are used to drafting it simultaneously with your mandate in case of incapacity.

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