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There are plenty of money moves that we should do but how many of them do we actually go through with? Who wants to worry about the future when spending money right now is so much more fun. Heck, even if we don’t have money we can still spend just by using our credit cards. This isn’t exactly the best idea but when has that stopped anyone?

So what exactly are the money moves we should make? Well again, that’s a matter of opinion. Some may believe that buying a million dollar home is an investment while others prefer to pay down debt. What we do with our money is a personal choice but there are a few things that we can do that will usually work in our favour.

Money moves to make

Pay down credit card debt

Carrying a balance on our credit cards can be crippling on our cash flow. Interest rates easily push 20% which looks manageable when we’re making minimum payments but it’ll cost us a small fortune in the long run. Student loans, mortgages, and even car loans can wait since the interest rates are much lower. High-interest debt is what we need to worry about.

Some would argue that building our emergency fund is more important in case we get laid off but that seems secondary if we let our spending get out of control. Think about it, our debt can easily spiral out of control to a point where we may not have a choice by to declare bankruptcy. Stick to a debt repayment plan before you make any other money moves.

Build our emergency fund

There’s been much debate about emergency funds as of late. Some people believe a line of credit counts as an emergency fund since they’re easily accessible at a low-interest rate. I personally don’t get why anyone would want to borrow more money to get out of a financial emergency but that’s just me.

I personally prefer to have a lump sum handy. I keep three months’ worth of expenses in “cash” in my bank account (which also waives my account fees) so I don’t need to worry if anything comes up. Some people prefer 6-months of cash but that’s a personal preference.

Save for retirement

There’s never a better time to start saving for retirement than right now. Okay, yesterday and anytime in the past would have been better, but we don’t have time machines so better now than later. The reason we want to save as early as possible is due to the power of compound interest. The more time our money has to grow, the more we’ll have when we retire.

Keep in mind there are a few ways that we can accelerate our retirement savings. If our employers offer any kind of pension or stock options, it’s in our best interest to sign up since it’s free money. We should try to keep our management expense ratios low since they’ll cost us a small fortune. It’ll literally cost us hundreds of thousands of dollars. Don’t believe me? Check out this skit from John Oliver.

Create a budget

Money moves are a lot easier when we actually know where our money is being spent. I’ve said this before but tracking our spending is one of the most important things we can do. It’s really not that hard to log everything we spend money on for a month or two. Once we have this info we can create a budget that prioritizes saving. Budgets change all the time so don’t feel too bad if you go over budget at times. We shouldn’t don’t want it to be a reoccurring theme.

Read a book on personal finance

Reading about personal finance is what really changed my life. It’s not like this a subject that’s taught in school so it was great having a reference to get me started. All of the money moves I listed above can be found in just about any personal finance book because they work. Here’s a list of my favourite Canadian personal finance books.


About Barry Choi

Barry Choi is a Toronto-based personal finance and travel expert who frequently makes media appearances. His blog Money We Have is one of Canada’s most trusted sources when it comes to money and travel. You can find him on Twitter:@barrychoi

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