**This is a sponsored post written by me on behalf of President’s Choice Financial®. All opinions are my own.
Did you know that November is Financial Literacy Month? The Financial Consumer Agency of Canada came up with the idea to encourage Canadians to take control of their finances. Private, public, and non-profit organizations all get in on the action by providing workshops and educational resources to help you learn about your money.
This year’s theme is “Take charge of your finances: It pays to know!” which encourages Canadians to take action to manage their money better. Of course, we all know that’s easier said than done which is why I prefer to keep things simple. Here are three steps to help get your finances back on track during Financial Literacy Month
Update your budget
Regardless of how good you are with your finances, it’s always worth updating your budget at least once a year. Things change all the time, you could be earning more (or less) money, and your spending habits may have changed without you even realizing it.
Updating your budget shouldn’t be too hard, but it will require you to return to the basics. Track all your expenses during the month of November so you can see where your money is going. If your spending has increased or decreased, adjust your budget accordingly. Don’t forget to update your income. Also, with the holidays right around the corner, you may want to put aside some extra money.
The point of updating your budget isn’t to save every dollar possible, but rather to ensure that things are on track, and that you’re saving for the things that are important to you.
Pay down your debt
If you have time to focus on just one thing this month, it should be paying down your debt (if you have any). Too often we think of our debt as monthly payments, but we need to think big picture. As long as we’re carrying debt, it’s going to be challenging to reach our financial goals.
One way to get rid of your debt is by using the debt-avalanche method. What that means is that you start with your highest interest debt, regardless of the amount owing, and then work your way down to your lowest interest debts. By focusing on the highest interest debts first, you pay less in the long run.
Understandably, if you have more than one debt, things can be intimidating, so why not start with the debt with the lowest balance and then work your way up? This is known as the debt-snowball method. Although you’ll pay more in interest compared to the debt-avalanche method, you’ll get a little mental boost every time you eliminate one of your debts.
Maximize your credit cards
We all know that we should pay off our credit card balances in full, every month to avoid interest charges, but are you using your credit cards to their full advantage?
Every credit card has different benefits and rewards, so you really need to know what you’re entitled to and spend accordingly to maximize your earnings. For example, I happen to shop at Loblaws branded stores quite a bit, so I use my PC Financial World Elite Mastercard since it earns me 3X the regular PC® points (worth 3% in rewards) on purchases at those stores. If I were to use one of my other credit cards, I’d only earn 1-2% in rewards.
Now think about where you shop on a regular basis and the type of rewards you like to earn, do your current credit cards match up with your spending habits? There’s no point in using a credit card that focuses on earning points when purchasing gas if you don’t drive or using a travel rewards credit card if you don’t like to travel. Which credit card you choose to use can make a big difference in the long run.
Financial Literacy Month is a reminder to all of that we should update our finances, but it’s up to us to do something about it. Managing our money can be intimidating, but by taking just a few steps, we can have a better grasp on our financial well-being.