Healthy financial habits don’t always come naturally - it takes effort, consistency, and discipline. But once you build them into your routine, you can impact your financial health.
If you want to explore more financial tips, continue reading. We’ll provide six healthy financial habits to kick-start your year and introduce iCash’s first-ever Healthy Financial Habits Challenge.
Accept the Healthy Financial Habits Challenge & WIN!
What better way to start the new year than by forming healthy financial habits and setting yourself up for success? It’s never too late to start! Plus, with iCash’s Healthy Financial Habits Challenge, you’ll have the support and motivation you need to stay on track.
You could be one of three lucky winners of cool cash-related prizes - a total worth of $300. All you have to do is accept the Healthy Financial Habits Challenge by heading over to the exclusive iCash giveaway page and following the easy steps to get in the running.
Improving your financial habits is a win-win with us! Get the chance to win some major prizes while setting yourself up for financial success. And remember, if you’re in a place where you need additional financial support, sign up for an online loan account to get instant funding up to $1,500.
Now, let’s get started with the six healthy financial habits to kick-start your year!
1. Create a Budget & Stick to It
Creating and sticking to a budget may seem tedious, but it’s essential. You can start by tracking your monthly expenses. This includes costs such as rent, utilities, groceries, etc. Leave some wiggle room for unexpected expenses or savings.
If you haven't created a budget or are unsure how, downloading an effective budgeting app is a great place to start. With features like automatic categorization of expenses and real-time account balance tracking, budgeting is easier than ever.
Once you’ve set up your budget, try your best to stick with it. Of course, some modifications may be needed along the way, but try to follow your budget as closely as possible. This will help you stay within your means and avoid overspending.
Why is Budgeting Important?
Budgeting is important because it allows you to see exactly where your money is going. It helps you identify areas where you’re overspending and lets you prioritize your expenses. This way, you can make the necessary adjustments to reach your financial goals.
For example, consider the case of Jamie - a young professional living paycheck to paycheck. Jamie started to budget, tracking her monthly income and expenses meticulously. She quickly realized that she was spending a large portion of her income on eating out and online shopping.
By creating a budget for herself, Jamie could allocate a specific amount for her discretionary expenses and save more of her hard-earned income. This not only helped her curb overspending but also allowed her to start an emergency fund of savings.
Why is budgeting important for Jamie? It gave her a clearer picture of her spending habits and helped her make the necessary changes to reach her financial goals.
2. Know the Ways to Save Money
There are countless ways to save money. It’s up to you to find what works best for your situation. Some easy ways to save money include cutting back on unnecessary spending, using coupons and discounts, and finding ways to lower your monthly bills.
For example, if you’re looking for ways to save money on groceries, try meal planning, buying in bulk, and flyer shopping. For lowering your monthly bills, consider negotiating with service providers or finding more affordable alternatives. And, if you want to save money on your utility bill, make the switch to energy-efficient appliances.
Another one of the ways to save money is by setting up automatic transfers from your chequing account to your savings account. This way, you won’t have to remember to save each month - it will happen automatically. It’s also a good idea to check your bank statements regularly for any unnecessary charges or fees you can avoid.
Following these simple money-saving tips can help you stay on track of your finances, building healthy financial habits that benefit you. Remember, saving money is not about depriving yourself of things you enjoy, but rather being smart with your spending habits and prioritizing your financial well-being.
3. Pay Off Debt
Pay off debt and make that a priority! Debt can be a huge burden and can prevent you from reaching your financial goals. One way to manage debt is by paying off high-interest loans or credit cards first. This will help reduce the amount of interest you pay over time so you can pay it off faster.
Another strategy is to consolidate your debt into a low-interest loan (if you’re able to). This can make it easier to track and manage your debt, and potentially, save you money on interest payments. Before moving forward, do your research and compare loan options.
Free Canadian Government Grants to Pay Off Debt
Of course, if you’re struggling to pay off debt, the Canadian government offers programs to help alleviate the financial burden. They offer free government grants to pay off debt and other debt management options.
One example is the Canada Student Loan Forgiveness Program, which forgives a portion of student loans for individuals who have completed their studies and are facing financial hardship. Depending on your profession, you may be eligible to have a portion or your entire student loan forgiven.
Additionally, a consumer proposal is a debt relief option guided by the Bankruptcy and Insolvency Act. It enables you to formally offer to pay creditors a portion of what you owe or to extend your payment period. While this can be beneficial for managing high debt levels, it may affect your credit score. Therefore, it's crucial to seek professional financial advice and carefully weigh the pros and cons.
4. Begin Saving for Retirement Now
While paying off debt is a priority, it’s also important to save for retirement as early as possible. The earlier you start, the more time your investments have to grow.
One way to do this is through a Registered Retirement Savings Plan (RRSP), which allows you to contribute pre-tax income toward your retirement savings. These contributions can also provide tax deductions, lowering your taxable income.
Another savings option is a Tax-Free Savings Account (TFSA), which allows you to save and invest after-tax income without paying taxes on any growth or withdrawals. It’s a wonderful way to save for both short and long-term financial goals, including retirement.
You may also benefit from a company-sponsored pension plan that allows you to contribute a portion of your income towards retirement savings. Some employers may match your contributions, making it even more beneficial over the long term.
Always research and understand the difference between retirement savings options available to you. Begin saving for retirement now by consistently contributing towards your savings goals. You’ll set yourself up for a comfortable retirement in the future.
5. File Your Taxes on Time
File your taxes on time and each year. This will help you avoid penalties and interest charges. You should also make sure you’re receiving any tax credits that you’re eligible for.
For example, if you’re a parent or caregiver, you may be eligible for the Canada Child Benefit (CCB), which is a tax-free monthly payment to help with the cost of raising children under the age of 18. Similarly, if you have a low or modest income, you may qualify for the GST/HST credit. This credit is a tax-free quarterly payment that helps offset the amount of GST/HST you pay on everyday purchases.
Don’t forget to keep track of any expenses you can claim as deductions or tax credits. These include charitable contributions, certain medical expenses, childcare costs, or tuition fees. Always document these expenses and keep any necessary receipts for tax purposes.
6. Maintain a Good Credit Score
Your credit score is a number range between 300-900 that represents your creditworthiness. It can affect your ability to secure loans, mortgages, or credit cards. A good credit score can also help you secure favourable terms and interest rates on these financial products.
To maintain a good credit score, you can follow these helpful tips:
Pay all of your bills on time and in full each month.
Avoid taking on too much debt or opening too many credit accounts at once, as it can negatively affect your rating. Of course, having some debt is normal, but keep it at a manageable level.
Make sure your credit report is accurate and up-to-date. You can obtain a free credit report from the two major credit reporting agencies in Canada - Equifax and TransUnion.
Dispute any inaccuracies your credit report may show. This can be done by contacting the credit reporting agency directly or through the financial institution that provided the incorrect information.
How to Improve Credit Score
If you have poor credit, there are steps you can take to improve it. One of the first things you can do is start making timely payments on all of your bills and debts. This shows lenders that you are responsible with your finances and can be trusted to make payments on time.
You can also improve your credit standing by keeping low balances on your credit cards. Going above your credit limit or having a high credit utilization ratio can lower your score. Keep balances as low as possible and aim to pay off the full balance each month.
Moreover, a short-term loan is a practical solution for raising your credit rating. These loans are typically smaller in amount and are designed to be paid back within a short period. This quick repayment schedule can be beneficial as it allows borrowers to demonstrate their ability to manage and repay debts promptly.
By consistently meeting repayment deadlines, you can positively impact your credit score. This is particularly important if you have limited or damaged credit history. Each successful payment is a step towards rebuilding a stronger financial profile.
Build Healthy Financial Habits with iCash
This can be your year to build healthy financial habits - and iCash can help! Wherever you are in your financial journey, it’s never too late to start making positive changes. If you want to stay on top of your financial goals, consider practicing the above habits.
With consistency and dedication, you can make this year your best financial year yet. And, don’t forget our Healthy Financial Habits Challenge to keep you motivated. We’re always here to support you!
Even if times are tough, we’ve got your back. Our easy instant loans provide a simple solution for unexpected expenses. With competitive rates and personalized payment plans, we’ll make sure you can stay on top of building healthy financial habits. Find our online loans website or download our easy loans app to get started now!