Investor Education Month gives Canadians an opportunity to learn how to manage their finances, especially in these challenging times.
Financial advisor John Maisey says the pandemic has impacted residents in different ways.
“If you’re in a service industry job, your income has gone down and you’re probably using your emergency fund if you were fortunate enough to have one. On the flip side, if you are a retiree who normally travelled maybe three to four months a year, chances are you have more money in you’re pocket right now than you ever had because you have had nowhere to spend your money on travel,” he says.
Maisey says those who find themselves in a tight financial situation do have some options when it comes to saving money.
He says the first step is to identify what it is you’re saving for in order to come up with a strategy to attain your goal.
“We have to figure out what you’re spending your money on right now, where is it going and then identify what the highest interest rate debt is. So for example, if you have a high-interest rate credit card versus a low-interest rate line of credit, are you taking advantage of using that line of credit to reduce the amount of interest you’re being charged on that debt,” says Maisey. “Sometimes you can free up a lot of cash flow just by doing things a bit differently.”
He says young investors have a particular advantage.
“Time is on their side. People that are able to start investing early on in life typically have to put less money away to end up with the same results as if they had started later,” Maisey says.
He says there are plenty of tools and resources online such as mortgage calculators, but interacting with an advisor is typically the best plan for action.
“It puts the onus on you to act whereas if you’re dealing with an online environment the follow-through often times isn’t there,” says Maisey.
