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Get Your Personal Finances on Track

By Rubina Ahmed-Haq on April 9, 2019 No Comments

Getting your personal financial house in order takes time and guts. You must put effort into setting up a system that will work for you, and come to terms with all the debt you’re carrying and your poor money habits. Studies show that money is one of the biggest stressors in our lives. A recent survey called Financial Stress, conducted by the Financial Planning Standards Council, found that Canadians rank money as their greatest stress. Personal finance ranked higher than personal health, work and relationships.

The good news is, once you have your personal finances on track, spending and saving become easier and often more enjoyable. If your money situation is causing stress, and you want to get on track, here’s where to start.

Know what life costs

We often don’t think about our month-to-month costs until we are faced with the loss of job or income. Then, we scramble to figure out what our total monthly expenditures are, and how we are going to continue to pay for them. Start ahead of a crisis by calculating what your life costs on a month-to-month basis. Write down everything you spend over three months. This includes rent, mortgage, utilities, clothing, food, medicine, transportation, entertainment, and so on. Once you have this three-month diary, take that number and divide it by three to get a realistic picture of what it costs per month to live the life you have.

Have an emergency fund

Once you have that realistic number of what life costs on average each month, you must begin adding money to your emergency fund. You should have enough money in that fund to cover at least three to six months of expenses in the case of an unexpected event, like losing your job, a loved one getting sick, or for any other reason that causes a slowdown in your income.  There is a great guide on how to set up an emergency fund on the Government of Canada website. In general, they recommended that you save the equivalent of three to six months of your regular expenses. It can take years to fully fund your emergency fund, but start now by putting small amounts away into a high interest savings account that you can use immediately if the need arises.

Make a money plan

There’s an old saying: If you fail to plan, you plan to fail. This is especially true with your money. Sit down with a partner or on your own and map out a 5-10-15 year plan. Where do you want to be at each point? Maybe your plan is to buy a house in five years, maybe it’s to have kids in 10 years. If you are older, maybe you plan to retire in 15 years’ time. Whatever your plan is, get it written down so you can start adjust spending habits now to reach your ultimate financial goals. If you have big expenses, like a wedding coming up, start planning now about what that wedding would cost, then divide that cost by the number of months or years you have left until that event happens, to see what you have to save each month to pay for it. You can do this with virtually any expensive you have in your plan.

Plan for retirement

This can be a hard sell to young Canadians, but nothing is more important that saving money for your future self. The earlier you start putting money away for retirement, the longer you have for it to grow. With the beauty of compound interest, a small amount invested today can grow to a larger sum compared to a big amount invested 15 years from now.  Go the CRA retirement calculator to figure out where you currently are in your retirement savings journey. The calculator asks you a series of questions that can take up to 30 minutes to answer. In the end, it outputs an educated guess of what your retirement will cost, and if you are saving enough to get there. This can give you a realistic picture of whether you’re on track, and you can adjust your savings accordingly.

To get your personal finance on track, the best move is to just start. Start saving more, start investing better, and start understanding what your goals are.  Once all this happens, it gets easier to see what your personal finance goals are and how you are going to reach them.

Rubina Ahmed-Haq


Rubina Ahmed-Haq is a Journalist and Personal Finance Expert. She is the go-to money expert in Canada for several media outlets. She regularly appears on CBC Radio, CBC News Network, CTV Your Morning and Global Toronto. She writes for Homes Publishing group, ratesupermarket.ca, debt.ca and has her own website www.alwayssavemoney.ca. Rubina began her career as a broadcast journalist in 1999. Since then she has covered everything from local news, foreign affairs, politics, sports and of course finance! As a business reporter she has worked for CP24 from the Toronto Stock Exchange and reported for BNN. Her work has also appeared in the Toronto Star and various other magazines. She has a Bachelor of Arts degree from York University and is an alumna of the Humber College post graduate journalism program and holds the CSC designation. Her goal is to help Canadians find easy ways to manage their own finances. Follow her on Twitter @alwayssavemoney.

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