- Make a budget
What happens if you haven’t planned ahead and suddenly pull yourself together in your 50s? “No matter the age, the first thing to do is to sit down with a financial planner and prepare a budget,” says Ms Labbé. So there is still time to take matters into your own hands. On the other hand, we will have to be realistic about our objectives. It is better to have more modest ambitions than our dreams of a golden retirement unless you hit the jackpot in the lottery or receive an unexpectedly large sum of money!
Use our monthly budget calculator to manage your expenses better and see whether or not you can balance your accounts.
Everything I didn’t know about my finances
- Set goals
We set ourselves to reduce our debts while putting money aside each month. Why reduce our obligations? In retirement, the money we have is not elastic… Therefore, it is preferable that our fixed expenses, particularly the mortgage, be reduced to the maximum. Therefore for Ms Labbé, it is necessary to reduce the mortgage as much as possible while you are still working. “For example, you can invest in an RRSP and use the tax refund to pay the mortgage more quickly,” advises the financial planner.
Three clever ways to increase your RRSP contributions
It also warns against a common mistake. “Many retirees decide to borrow again on their house to have more liquidity. But beware: if interest rates rise, mortgage repayments will take up more and more space in our budget.”
- Adopt a strategy
To achieve our savings goals, we need a strategy. Perhaps we will have to reduce our current standard of living a little and review our priorities. A little less leisure and a little more money aside, for example. “We have to be disciplined, stick to our strategy and not touch the money set aside for retirement! At the same time, we shouldn’t see it as a punishment but rather as a way to achieve our goals. To encourage ourselves, we have to recognize our good deeds, such as the tax refunds obtained thanks to an RRSP,” says Suzie Labbé.
Another mistake people sometimes make stepping out of their “comfort zone” and going against their investment values. “When you identify as a cautious investor, you don’t go into bold and risky investments to try to make up for the lost time. It just adds unnecessary stress,” she concludes.
How to reduce investment risk
What if we have more time?
Your thirties are the time to form good habits! “We start by making a budget; it’s an excellent exercise that allows us to know where our money is going,” explains Suzie Labbé. Another healthy habit to adopt is not living beyond our means and getting into debt as petite as possible to balance our finances and save.
How to Avoid Succumbing to FOMO Syndrome to Stay in Control of Your Finances
Savings: putting the cabin in order!
The budget must be scalable. Our salary is likely to increase over the years, as our experience is recognized on the job market. In our forties, we can therefore improve our savings goals.
