11 Money Management Guidelines

  1. Plan
    Plan for the future including retirement and children’s education and for major purchases such as a house, cars, vacations, etc.
  2. Set Financial Goals
    – Set short, mid and long-term financial goals and determine how to achieve them. The “how” is the most important part of the goal planning.
  3. Know Your Financial Situation
    – Determine your monthly living expenses, irregular expenses and monthly debt service payments and make a budget.
  4. Keep a Record of Daily Expenses
    – Be aware of where your money is going and identify areas where spending adjustments need to be made.
  5. Develop a Realistic Budget
    – Follow your budget as closely as possible. 
    – Evaluate your spending month to month. 
    – Compare actual expenses with planned expenses. 
    – Adjust budgets as required.
  6. Don’t Allow Expenses to Exceed Income 
    – Avoid paying only the minimum on your credit cards. 
    – Don’t charge more every month than you are able to repay to your creditors. 
    – Try to keep a zero balance in your credit cards
  7. Save 
    – Save at least 10% of your net income for yourself. 
    – Accumulate a minimum 3 months net salary for an emergency fund. 
    – Save for irregular expenses such as car and home maintenance, gifts, vacations, etc. 
    – Take advantage of current income tax rules which allow for tax-deductible savings for retirement plans (RRSP, TFSA).
  8. Pay Your Bills On Time 
    – Maintain a good credit rating. 
    – If you are unable to pay your bills as agreed, contact your creditors and explain your situation
  9. Understand the Difference between Your Needs and Your Wants 
    – Identify what your needs are. 
    – Money should be spent for wants only after your needs and savings goals have been met. 
  10. Use Credit Wisely 
    – Use credit for safety, convenience and planned purchases. 
    – Determine the total you can comfortably afford to purchase on credit before you buy. 
    – Don’t allow your credit payments to exceed 20% of your net income. 
    – Do not borrow from one creditor to pay another.

Get Financial Protection
Make sure you have enough insurance protection for potential financial losses.  You don’t want to find yourself in a financial crisis.