Now that we can finally say good-bye and good riddance to winter it’s time to get our households in order. Springtime always means spring cleaning in our home but it shouldn’t stop short at just your cupboards and closets. As parents, we should also take a good inventory of what’s been happening with our finances over the fall and winter months and get back on track.
Reporters have often asked us, if someone is only able to focus on eliminating three bad money habits, which would you say are most important and why?
And because we’re in the business of helping families put money aside for their child’s education in a Registered Education Savings Plan (RESP). We’re all about planning for the long-term and believe that every little bit you save today can help set your child up for future success.
Here are three bad money habits Canadians should focus on eliminating this year:
1. Not having a household budget.
According to Statistics Canada, household debt levels are approaching record highs; Canadians owe more than $1.63 for every $1 of disposable income. Its clear families are spending more than they are earning, which may be a sign that they are not talking about their finances or may not be setting realistic goals. A budget helps ensure everyone is on the same page and keeps us accountable about our spending.This makes it a lot easier to say no to those impulse buys when we know we’re going to have to explain it someone else!
2. Carrying a large balance on your credit cards.
Credit card debt can be the worst of all – with high interest rates eating up most of your payments when you carry larger balances. The message is simple: stop spending money you don’t have! When you do this, you’ll be able to start saving more for things that matter – such as your child’s post-secondary education.
3. Keeping all of your money in a savings account.
Saving is good; in fact it’s excellent. But you also need to ensure you’re maximizing your earnings. Investing in a savings vehicle like a Registered Education Savings Plan (RESP) or Registered Retirement Savings Plan (RRSP) come with their own unique advantages that will help set your family up for long-term success. Even safe investments will earn more than a savings account over time, and you’re less likely to dip into these accounts to satisfy your short-term needs as they are structured to keep you disciplined.
Edyta McKay is a working mom with two amazing kids; Jack who is 4.5, emphasis on half and Kaia who isn’t even two, yet insists on doing everything her older brother does. She lives in the big city of Toronto, Ontario with her very energetic family spending her days working as the Corporate Communications Manager for CST and a full time blogger for Parentwise. She’s dished out parenting advice on CTV and Global News where Jack has made some appearances as her side-kick.