We asked a financial expert how we can be smarter with our money

Nov 8 2018, 8:17 pm

Financial confidence: What does it mean to you?

Maybe it’s working out your own personal monthly budget, saving for your university fees, or putting money aside for that dream trip to travel the world. Everyone has a different definition of financial confidence, and you can reach your goals when you’ve got the right plan.

You deserve financial confidence, and an important key to that is understanding how to manage your finances and how it impacts your day-to-day life. Every day you’re making money decisions, so why not be more thoughtful about them?

Whether it’s related to your daily banking, basic budgeting, your business banking, or even planning for retirement (yes, it seems far away, but it’s going to happen), you need the tools that put you in control.

We’ve asked G&F Financial Group to find out how we can be smarter with our money, and their team of money experts gave us a crash course in finance. Here’s what we learned.

Tip #1: Invest for your future 

Never invested before? That’s not a problem. At G&F, they believe that when you follow four simple pillars of investing it will help you reach your financial goals faster.

  • Start early: Did you know, an individual who starts investing at age 25 for 20 years will have more than double the amount of money at age 65 than someone who started investing at 45 for 20 years (assuming a modest 4% rate of return). By starting early, you’ll enjoy the benefits of compound interest (earning interest not just on what you put in, but also on the money it picks up along the way) and that is what makes the biggest difference in how much you save.
  • Invest regularly: Contribute something each month. This will mean you will naturally be maximizing your investing when markets are lower and investing less when prices are high.
  • Stay invested: It’s tempting to move your money when markets are down but you may miss out on the good days when the market improves. Focus on the long-term, not short-term fluctuations.
  • Don’t put all your eggs in one basket: Diversity — certain types of investments will tend to rise when others decline. Opting for a combination of investment types, asset classes, companies, and regions, will help smooth out your returns.

Tip #2: Manage your credit card 

Let’s be real, understanding and handling your credit properly is one of the most important things you can do for your personal finances. When you have healthy credit habits, it makes it easier for you to rent properties or arrange financing for big purchases, like buying a home or a car. Using your credit card wisely can help develop those healthy habits.

Here’s how you can start developing those healthy habits with your credit card.

  • Pay it off: Pay the full credit card balance each billing cycle and avoid paying that costly interest.
  • Never ever skip a payment: Even if the minimum payment is all you can afford. Missing a payment could result in a late fee, penalty interest rates and a negative impact on your credit score. However, the habit of just paying the minimum will keep you in debt for a very long time.
  • Rack up the rewards: If you’re using a credit card regularly, it makes sense to use a card that offers rewards and perks such as cash, airline miles, or retail points.
  • Stay under 30% of your total credit limit. One way to keep your credit score healthy is to keep your credit utilization ratio under 30%. That means, on a credit card with a $1,000 limit, keeping your balance below $300.
  • Check your credit card statements (and credit report) often: Even if you avoid risks you should still remain vigilant against fraud.
  • Don’t have too many cards. Having too many cards can make it temptingly easy to spend more than you should. Plus, it can count against you on your credit report and your credit score.
  • Avoid cash advances if at all possible. They’re really expensive. You’ll wrack up fees and be charged interest immediately, with zero grace period.

Tip #3: The credit union advantage

Credit unions are full-service financial institutions that offer the same products and services that banks do (and sometimes more) to members. They can help you with everything from daily banking to wealth management advice, to mortgages, and other lending and deposit products.

G&F, like other credit unions, follow the co-operative principles like collaboration, open membership, and concern for community. These principles mean credit unions are focused on the financial empowerment of members and take an advice-focused position in dealing with members.

Here are three things you may not know about credit unions.

  • All Canadian credit unions are a part of the ‘ding free network’ which allows members to free access over 4,000 ATMs across the country — without paying any added fees.
  • In BC, credit unions provide unlimited deposit protection with no caps. (Banks limit their protection to $100,000.)
  • Credit unions have always been forward-thinking and community focused and have achieved a lot of ‘firsts’ in the financial industry; they were the first to offer open mortgages, home equity lines of credit, and registered education plans.

Visit G&F Financial Group’s newest boutique location in the West End at 1003 Denman Street at Nelson. Drop in for a Smart Money Check and speak with their knowledgeable team on how they can empower you to make your best financial decisions. Or maybe join their next Tech Day One-on-one event, December 5. See more G&F events at Eventbrite.

Pro tip: If you open a G&F account, start a payroll deposit or a pre-authorized debit, you can earn up to $250. (Find out more here.)