An annual research study from Northwestern Mutual casts the spotlight on some of Gen X‘s most pressing retirement issues as the group approaches its golden years.
First, Gen Xers said they’d need $1.57 million to retire comfortably, or $310,000 more than the “magic number” national average, according to the research.
More than half (56%) of Gen Xers thought they’d likely outlive their savings, while just 40% of Boomers and beyond felt the same, per the report.
Across all generations, Gen X was the least likely to report the expectation of an inheritance.
Additionally, Gen X respondents were more concerned than millennials or Boomers about paying off their mortgage: 25% compared to 24% and 18%, respectively.
Gen X also reported less understanding of some critical factors that could impact their retirement plans. For example, they had a looser grasp on how inflation (53%) and taxes (49%) could affect their financial plans, compared to 66% and 62% of Boomers.
What’s more, 50% of Gen X admitted to a “common blindspot” when it comes to managing their finances: They said they’d prioritized building wealth without doing enough to protect their assets. Just 35% of Boomers felt the same.
“Growth without protection can leave people vulnerable,” Jeff Sippel, chief strategy officer at Northwestern Mutual, said. “Especially as you get older, safeguarding what you’ve built is just as critical as continuing to build. A holistic plan should account for both.”
But Gen Z is also the most digitally savvy generation yet, quick to adopt budgeting apps, mobile wallets, and investing platforms. The result is a generation redefining what it means to manage money in Canada today.
By the numbers
Workers of all ages have to contend with stagnant paycheques and irregular work alongside a surging cost of living, but Gen Z is doing it as the youngest workers in the country.
A recent report by fintech company KOHO paints a pretty grim picture for young Canadians. According to their numbers, only 41% of Gen Z are employed full time and nearly 20% are unemployed. With an average monthly income of just $1,083, it’s no surprise that nearly half expect to take on more work in the next year—and only 29% say they feel financially stable.
Unsurprisingly, there’s not a lot of wiggle room in Gen Z budgets. Respondents report forgoing investing, savings, and luxuries like travel to cover the basics, and many are also cutting their discretionary spending (52%) or borrowing from family (28%) to do so.
These findings won’t come as a surprise to labour market watchers, but here are some numbers that might: According to the findings from a recent survey by the National Payroll Institute (NPI), Gen Z workers save an average of 11% of each pay cheque, higher than any other generation. And 30% of Gen Z respondents reported saving $10,000 or more in the past year alone.
Here’s another stunner: A recent TD survey showed 68% of Gen Z are investing consistently, and more than any other age group in Canada.
Compare the best TFSA rates in Canada
Young investors
According to the survey, only 49% of Canadians feel like they’re investing enough, but there’s a clue in the data about the disparity between Gen Z investors and other workers. A full 45% of respondents cited a lack of confidence in their investment knowledge as a factor.
Gen Z, on the other hand, isn’t waiting for an appointment with a financial advisor to make their investment decisions. They’re getting advice from social media, podcasts, and TikTok—and then they’re downloading investment apps and opening tax-free savings accounts (TFSAs).
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Put simply, young investors are using young peoples’ tools to educate themselves and put money away for the future.
Paycheques and portfolios
Few would choose to go back to the stresses of their early career, especially now, while wages stagnate and the cost of living soars. Yet Gen Z is, if not thriving, at least surviving—and despite a financially challenging environment, they’re finding a way to build their investments. They want paycheques and portfolios. Here’s how they’re doing it.
Gen Z is using budgets to identify and reduce discretionary spending. They understand that even small amounts add up if you save regularly, so “nice to haves” can wait. As a digitally native generation, Gen Z is comfortable using resources that are freely available to them—like podcasts and social media—to educate themselves. Then, importantly, they use financial apps and go online for investing, starting with leveraging tax-advantaged accounts like TFSAs and first home savings accounts (FHSAs).
Gen Z understands the maxim, “Pay yourself first.”
A new financial culture
Gen Z is entering adulthood at a time when housing is less affordable than ever, wages often lag behind rising costs, and debt loads are increasing at a worrying pace. Yet, rather than retreat, many are finding creative ways to take control—embracing digital tools to budget and invest, relying on debit and mobile wallets to manage everyday spending, and supplementing incomes with side hustles or gig work.
While the challenges are real and persistent, this generation’s willingness to learn, experiment, and rethink traditional approaches to money shows that they are not just surviving difficult conditions, but laying the groundwork for a new financial culture.
While the financial road ahead may be uncertain, Gen Z’s adaptability, digital savviness, and determination suggest they’re well-equipped to carve out a stable future—and could reshape what financial stability looks like for the generations that follow.
Get free MoneySense financial tips, news & advice in your inbox.
But Gen Z is also the most digitally savvy generation yet, quick to adopt budgeting apps, mobile wallets, and investing platforms. The result is a generation redefining what it means to manage money in Canada today.
By the numbers
Workers of all ages have to contend with stagnant paycheques and irregular work alongside a surging cost of living, but Gen Z is doing it as the youngest workers in the country.
A recent report by fintech company KOHO paints a pretty grim picture for young Canadians. According to their numbers, only 41% of Gen Z are employed full time and nearly 20% are unemployed. With an average monthly income of just $1,083, it’s no surprise that nearly half expect to take on more work in the next year—and only 29% say they feel financially stable.
Unsurprisingly, there’s not a lot of wiggle room in Gen Z budgets. Respondents report forgoing investing, savings, and luxuries like travel to cover the basics, and many are also cutting their discretionary spending (52%) or borrowing from family (28%) to do so.
These findings won’t come as a surprise to labour market watchers, but here are some numbers that might: According to the findings from a recent survey by the National Payroll Institute (NPI), Gen Z workers save an average of 11% of each pay cheque, higher than any other generation. And 30% of Gen Z respondents reported saving $10,000 or more in the past year alone.
Here’s another stunner: A recent TD survey showed 68% of Gen Z are investing consistently, and more than any other age group in Canada.
Compare the best TFSA rates in Canada
Young investors
According to the survey, only 49% of Canadians feel like they’re investing enough, but there’s a clue in the data about the disparity between Gen Z investors and other workers. A full 45% of respondents cited a lack of confidence in their investment knowledge as a factor.
Gen Z, on the other hand, isn’t waiting for an appointment with a financial advisor to make their investment decisions. They’re getting advice from social media, podcasts, and TikTok—and then they’re downloading investment apps and opening tax-free savings accounts (TFSAs).
Article Continues Below Advertisement
Put simply, young investors are using young peoples’ tools to educate themselves and put money away for the future.
Paycheques and portfolios
Few would choose to go back to the stresses of their early career, especially now, while wages stagnate and the cost of living soars. Yet Gen Z is, if not thriving, at least surviving—and despite a financially challenging environment, they’re finding a way to build their investments. They want paycheques and portfolios. Here’s how they’re doing it.
Gen Z is using budgets to identify and reduce discretionary spending. They understand that even small amounts add up if you save regularly, so “nice to haves” can wait. As a digitally native generation, Gen Z is comfortable using resources that are freely available to them—like podcasts and social media—to educate themselves. Then, importantly, they use financial apps and go online for investing, starting with leveraging tax-advantaged accounts like TFSAs and first home savings accounts (FHSAs).
Gen Z understands the maxim, “Pay yourself first.”
A new financial culture
Gen Z is entering adulthood at a time when housing is less affordable than ever, wages often lag behind rising costs, and debt loads are increasing at a worrying pace. Yet, rather than retreat, many are finding creative ways to take control—embracing digital tools to budget and invest, relying on debit and mobile wallets to manage everyday spending, and supplementing incomes with side hustles or gig work.
While the challenges are real and persistent, this generation’s willingness to learn, experiment, and rethink traditional approaches to money shows that they are not just surviving difficult conditions, but laying the groundwork for a new financial culture.
While the financial road ahead may be uncertain, Gen Z’s adaptability, digital savviness, and determination suggest they’re well-equipped to carve out a stable future—and could reshape what financial stability looks like for the generations that follow.
Get free MoneySense financial tips, news & advice in your inbox.
An extraordinarily rare dime whose whereabouts had remained a mystery since the late 1970s has sold for just over $500,000.
The coin, which was struck by the U.S. Mint in San Francisco in 1975, depicts President Franklin D. Roosevelt and is one of just two known to exist without its distinctive “S” mint mark.
Three sisters from Ohio inherited the dime after the death of their brother, who had kept it in a bank vault for more than 40 years.
The coin sold for $506,250 in an online auction that concluded Sunday, according to Ian Russell, president of GreatCollections, an auction house based in Irvine, California.
This undated image provided by GreatCollections shows a 1975 proof set dime mistakenly made without the San Francisco Mint’s letter S mintmark.
GreatCollections via AP
The only other known example of the “1975 ‘no S’ proof dime” sold at a 2019 auction for $456,000 and then again months later to a private collector.
The mint in San Francisco made more than 2.8 million special uncirculated “proof” sets in 1975 that featured six coins and were sold for $7. Collectors a few years later discovered that two dimes from the set were missing the mint mark.
Russell said the sisters from Ohio, who wanted to remain anonymous, told him that they inherited one of those two dimes but that their brother and mother bought the first error coin discovered in 1978 for $18,200, which would amount to roughly $90,000 today. Their parents, who operated a dairy farm, saw the coin as a financial safety net.
Although 83% of U.S. adults said parents are the most responsible for teaching their children about money, 31% of American parents never speak to their kids about the topic, according to a survey from CNBC and Acorns.
Last week, the subject came up on Northwestern Mutual’s A Better Way to Moneypodcast, which featured social media star and owner of Stur Drinks Kat Stickler and Northwestern Mutual vice president and chief portfolio manager Matt Stucky.
“I love and respect my parents, but we didn’t really talk about money ever — I never saw them talk about money,” Stickler told Stucky during the conversation. “It was taboo. It wasn’t brought up once.”
According toStucky, parents can instill strong money management skills like any other good habit.
“It just takes a lot of repetition — things like saving, investing,” Stucky said. “I’m not going to teach my 4-year-old about investing, but just the idea of if I save a dollar, that means I can spend it down the road on something that I really want. That takes a while to sink in.”
Money might not have been a regular topic of discussion while Stickler was growing up, but the entrepreneur says her mother did show her the value of a dollar in other ways: repurposing old jeans into shorts or empty butter tubs into containers for school lunch.
In addition to talking to their kids about money, parents can lead by example when it comes to smart financial decisions.
“There are new risks that are now in the equation of being a parent,” Stucky said. “Things like, What if something happens to me; what if I can’t work anymore? How does that impact my child’s financial life?“
Navigating those uncertainties means planning for big-ticket items, according to Stucky. Stickler, who has a young daughter, said she’s already taken some key steps to secure her future: setting up a will complete with a month-by-month timeline and establishing funds for healthcare and school — and even one for clothes and toys.
According to Stucky, parents should leverage today’s circumstances for tomorrow’s success.
Stucky recommends setting up a 529, to which you can contribute funds for education, and a Roth IRA for your child.
“[With a Roth IRA], you are able to contribute on their behalf up to the child’s earned income amount or the current contribution limits of $7,000, and the dollars come out tax-free after age 59 ½ or if they need to use it for a qualifying life event,” Stucky explains. “It’s a way to set up your children for their retirement, as well as support generational wealth.”
Parents might also consider a Uniform Transfer to Minors Account (UTMA), which has no limit on the amount that goes in and allows them to retain control until their kids reach 18-21, depending on where they live, Stucky says.
Finally, Stucky recommends the “often overlooked option” of permanent life insurance for your child.
“The policy will pay a death benefit someday so long as the required premiums are paid,” he explains. “In addition, policies accumulate cash value, which your child could access during their lifetime.”
What was the biggest money lesson you learned as an adult?
The understanding of how big a role your identity plays in your finances. Finance is deeply personal and intersectional, and your money is directly impacted by aspects of your identity such as privilege, race, gender, sexual orientation, mental health, disability, systems of oppression and more. The identities you hold will impact how you view, understand, spend and approach your money.
I didn’t fully understand this until I came out as queer and was diagnosed with ADHD. These realizations helped me make sense of a lot of my money behaviours and challenges. For example, I struggled with impulse spending for years, and ended up with $15,000 of high-interest debt because of that. I felt so ashamed of this debt, but I didn’t know that having ADHD makes me four times more likely to impulse spend than someone without ADHD. By understanding who you are, the privilege you hold and/or barriers you face, your lived experience and your trauma, you can begin to change your relationship with money and create a financial plan that makes sense for your life.
Learning this lesson is what inspired me to write a book and start my financial literacy company, Queerd Co., where our approach to financial literacy goes beyond the conventional, giving folks permission to be full human beings—not just numbers on a spreadsheet. At Queerd Co., our goal is financial equity, and every course we create, resource we recommend, space we hold and discussions we lead will aim to take a shame-free and identity-based approach to money.
What’s the best money advice you’ve ever received?
That your financial situation is not your fault, and the shame you feel around money is not solely your shame to carry. I learned this inside of the Trauma of Money certification program, where we spent time examining and unpacking the idea of shame and responsibility when it comes to our money. The reality is that many of us inherit money trauma and learn our financial behaviours and habits from our caregivers. We also have to consider the government policies, financial institutions, and larger societal systems such as capitalism, and how those play a role in the decisions we make and the financial challenges we are subjected to. In the Trauma of Money, we were taught to ask ourselves, “Whose shame is this?” to help call attention to the fact that some of the shame we feel has been placed upon us, despite it not being our shame to carry. This advice really helped me reframe the way I felt about my past financial decisions.
What’s the worst money advice you’ve ever received?
I tell this story in chapter 1 of my book, which is all about finding safe spaces: The first time I went to talk to a financial advisor at the bank, the advisor made a misogynistic comment along the lines of, “When you have a husband, he will take care of this for you.” This was his response when I tried to ask questions about some financial terms he had briefly mentioned. This was horrible advice because: a) it was misogynistic; and b) it was encouraging me to not be in control of my own financial situation. I cannot stress enough how important it is to have financial autonomy, even within a marriage. If you ever find yourself in an abusive relationship, having access to your own money will give you the freedom to leave.
Would you rather receive a large sum of money all at once or a smaller amount regularly for life?
It would depend on the amount. If the smaller amount was enough to cover my monthly expenses, then I would choose that option, because it would give me the immense privilege of never again stressing about paying my bills. It would also take a lot of pressure off my business and allow me to explore more creative pursuits. But if the amount wasn’t enough to cover my bills, then I’d prefer the lump sum. I could actually make more money from the lump sum in the long term by investing it, but the first example would be a better decision emotionally.
What do you think is the most underrated financial advice?
Gamify your finances. This is great advice for almost everyone, but especially for anyone who is neurodivergent. If you can make managing your money fun and enjoyable, you’ll be more likely to actually keep up with it, and have greater success with reaching your goals.
What is the biggest misconception people have about growing money?
That being “good with money” and building wealth is just a math game, and that all you need to do is manipulate the numbers—it’s so much more than that. Creating the perfect spreadsheet, debt repayment plan or investment strategy will never address the root of your money issues. We’ve been taught that if we follow the formulaic system for success, we will be wealthy and happy. But there’s no magic formula for success, because everyone’s lived experience, values, goals and definitions of wealth are different.
Owners of small- and medium-sized businesses check their bank balances daily to make financial decisions. But it’s enterpreneur Yoseph West’s assertion that there’s typically information and functions missing from bank accounts that owners could really use.
“SMBs make up 44% of U.S. GDP, underpin the economy and have a deep impact on all of us,” West said in an interview with TechCrunch. “And yet most SMBs only have enough cash on hand to last 27 days. They need greater cash flow clarity and control in their banking.”
West, who studied equity and debt finance in college, co-founded Vuru, a stock market research app, in 2012. After fintech firm Wave Accounting acquired Vuru later that year, West stayed on, eventually graduating to the role of director of product engagement.
While at Wave, West had the idea for his next company: Relay, a business banking and money management service for SMBs. West teamed up with Paul Klicnik, an ex-IBM engineer who previously developed the core technical infrastructure at coupon app Flipp, to launch Relay in October 2018.
“Relay is an online business banking and money management platform designed to help small businesses take control of their cash flow,” West explained. “The platform is focused on delivering true cash-flow clarity to SMBs.”
Relay’s platform lets SMBs organize their income, expenses and reserves across up to 20 checking accounts. (Relay isn’t a bank itself; the company relies on its partner Thread Bank for the banking services it provides, which West says are FDIC-insured.) Through Relay, a company can automatically set aside cash into savings accounts with 1%-3% APY and issue up to 50 physical or virtual Visa debit cards to employees.
Relay users can send and receive ACH transfers, wires, and check payments like they would with traditional banks. And they can capture and store receipts, allowing people in their employ access through role-based accounts.
The company makes money through interest on customer deposits, card interchange fees and a $30 per month premium service (Relay Pro) that adds features like same-day payments, and competes with neobanks such as Bluevine and Mercury. But West argues that Relay is one of the few of its kind not focused on tech startup or individual business owner customers.
“Relay is built for the 33-million-plus SMBs in the U.S. and their in-house or outsourced finance functions,” he said. “We primarily serve ‘heart of America’ small businesses that have 2-plus employees — full-time, part-time or contracted — and make $20,00 to $200,000 in monthly revenue.”
Image Credits: Relay
This has proven to be a winning strategy.
West predicts that Relay will reach $100 million in annualized revenue by the second half of this year. Revenues rose 3x in 2022 — and close to 6x in 2023 — thanks to a robust client base that now stands at ~100,000 businesses.
That’s all the more impressive considering the state of the fintech industry.
Last year, venture investment in financial services and fintech fell to $43 billion, its lowest level in six years and down more than 50% year-over-year from the $89.5 billion invested in 2022, according to CrunchBase. The austere funding environment contributed to the collapse of fintechs such as Synapse, the banking-as-a-service startup whose bankruptcy has impacted the finances of millions of customers.
To help lay the groundwork for expansion into new spaces including spend management, crediting and financial APIs, Relay this week closed a $24 million Series B round led by Bain Capital Ventures with participation from BTV, Garage, Industry Ventures, and Tapestry. The new cash bring the startup’s total raised to $51.6 million.
“We chose to raise because of our growth rate,” West said. “To truly get predictive cash flow analytics, SMBs need a unified view of the inflows and outflows of cash across their back office. Relay is building towards that vision … In the future, the platform will make smart recommendations to small businesses based on what is happening in their entire back office.”
Relay, which is based in Toronto, plans to grow its workforce from 140 people to 200 by the end of the year.
Paying off your loan before the agreed-upon tenure? This article discusses the pros, the cons, and everything in between regarding loan foreclosure.
Once upon a time, you decided to take a loan. You were living the dream, buying things you wanted, and making monthly payments like a champ. But then, you hit the jackpot (or maybe just saved up enough), and you thought, “Why not just pay off this loan and be done with it?”
Well, my friend, welcome to the world of loan foreclosure! Now, don’t let the term scare you. It’s not as ominous as it sounds. What you must be aware of are the foreclosure charges. Also known as prepayment charges, it is the fees lenders charge (some don’t) if you decide to pay off your loan before its term ends. It’s like a break-up fee for ending a relationship early. The lender is basically saying, “Hey, I was expecting more interest from you. Since you’re leaving early, you owe me.” These charges usually vary between 3-6% of the outstanding loan amount.
However, if you took a loan at a floating interest rate, you’re in luck! The RBI has mandated that foreclosure charges are not applicable on floating interest rate loans sanctioned for individual borrowers. So, you can sail away on your floating interest rate boat without any extra charges, just like our co-branded Credit Cards without any fees. But if your loan has a fixed rate of interest, you might have to pay the piper.
Now you might be wondering how to go about the loan foreclosure process? It’s simple! First, check your loan agreement to see if any foreclosure charges apply. Then, speak to your lender and fill in a foreclosure form if required. Submit the required documents such as original loan agreement, your ID, income docs and pay off your entire loan along with penalties, if any, and that’s it! You’ve made it! Just make sure you get the loan closure certificate from the lender to complete the process.
So, should you pay it off early or let it run? When faced with making a decision, it’s always a good idea to weigh the pros against the cons. So, here are some benefits of closing your loan early.
You can save on interest charges and reduce your financial burden.
You may be able to improve your Credit Score by lowering your overall debt and boosting your debt-to-income ratio.
Lastly, clearing a loan would give you a sense of financial freedom. You can allocate the funds previously used for EMIs towards other financial goals or investments.
Having said all that, closing the loan early may not always be a wise move. Do consider these factors/scenarios before you decide.
For Personal Loans, the interest is tax-deductible in some cases such as the purchase, construction, repairs or renovation of your house property. By foreclosing, you’ll lose this benefit.
You could have invested the excess funds in stocks or mutual funds for higher returns. Don’t let that be a missed opportunity.
Don’t risk your emergency funds for loan foreclosure. Unexpected expenses may arise, and having liquid funds is crucial.
Lastly, it’s always best to check with your lender or read the loan agreement to understand the foreclosure charges as foreclosure rules and its calculation may vary from one lender to another. Personal Loan foreclosure can be a smart move if done strategically. Remember, financial decisions are personal, so choose what aligns best with your goals.
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To keep your spending in check, adopt smart shopping strategies both in stores and online. Despite the rising cost of living, it’s possible to stretch your budget further. You can maintain your lifestyle while building your savings, Offermate can just help you with that.
This means actively avoiding unnecessary purchases and ensuring that what you buy is more of an investment than a spur-of-the-moment decision.
Key Takeaways
Cut unnecessary expenses.
Use lists and coupons, and buy in bulk.
Brew coffee, and use cash-back cards.
Have clear, realistic savings targets.
Choose no-fee banking options.
11 Tips For Your Budget
1. Look at Your Spending
Check where your money goes each month. Can you find areas to cut back? For instance, if you’re buying lunch outside every day, think about reducing it to a few times a week.
Making small changes like this can help you save money in your budget.
2. Prepare a Shopping List
To avoid overspending on things you don’t need, create a shopping list before you go out.
This keeps you on track to buy only what you need, helping to prevent impulse buys.
3. Check Prices Before Buying
Always compare prices before making a purchase.
You might discover the same item is cheaper elsewhere or find a less expensive alternative to what you originally planned to buy.
4. Use Your Coupons
Start by collecting coupons from different places to make sure you’re getting the best deals out there. Look in local newspapers, store newsletters, and websites for the latest discounts.
Concentrate on getting coupons for things you already buy to avoid spending money on items you don’t need, just because they’re on sale dude.
5. Cut Back on Non-Essential Spending
Everyone has essential expenses such as food and housing. We often spend money on things we don’t need, like frequent meals out or new clothes when our closets are already full.
By reducing these types of expenditures, you can save a significant amount of money.
6. Set Your Savings Goals
It’s important to establish clear financial goals for each month. This approach turns budgeting into a goal-oriented process, whether it’s accumulating an emergency fund or saving for a big purchase.
By applying the S.M.A.R.T. criteria—Specific, Measurable, Achievable, Relevant, and Time-bound—to your financial objectives, you create a practical plan that not only keeps you focused but also motivated to save.
7. Distribute Your Income Wisely
Once you’ve set your savings goals, the next step is to organize your monthly income to cover all your expenses while still meeting your savings targets. The 50/30/20 budgeting rule is a useful framework here, dividing your income between needs, wants, and savings or debt repayment.
Always prioritize essential expenses first. After that, you can allot money for personal desires and then set aside funds for savings and paying off any debts. Regularly adjusting how you allocate your money is crucial for dealing with financial shifts and keeping your savings strategy on track.
8. Take Advantage of Seasonal and Bulk Purchases
Buying fruits and vegetables when they’re in season can save you money and provide better-tasting produce. Check local seasonal guides to plan your meals around what’s currently abundant.
Also, buying items in bulk, especially those that don’t spoil quickly or things you use often, can significantly reduce your expenses. Remember to compare prices by the unit to make sure you’re getting a good deal. Keep an eye out for coupons and discounts to stretch your grocery budget even further.
9. Make Coffee at Home
Spending $2.50 to $4 daily on coffee from a cafe can add up to $625 to $1,000 a year. This calculation doesn’t even cover more expensive drinks like lattes. However, purchasing a pound of quality coffee for about $15, which makes at least 30 cups, reduces your cost significantly.
By brewing your coffee at home, your annual expense drops to roughly $125. This change can save you between $500 to $875 yearly, and over $45,000 across a lifetime, not a small amount huh?
10. Use a Cash-Back Credit Card for Everything
Take full advantage of credit cards that offer cash-back rewards by using them for all possible everyday expenses: groceries, fuel, bills, dining out, and anything else you regularly pay for. Just ensure you pay off the entire balance each month to avoid interest charges, which can negate the benefits of any rewards earned.
Take a closer look at your bank account statements and you might be shocked by the fees you’re paying for some stuff.
To cut down on these fees, use only ATMs that don’t charge you, make sure you have enough money in your account to cover checks to avoid overdraft fees, and use credit cards or free peer-to-peer payment apps like Venmo instead of withdrawing cash.
If you’re still getting hit with high fees, think about switching banks. If your current bank isn’t helping you lower your fees, an online bank could be a good alternative. They usually don’t charge monthly maintenance fees or require a minimum balance, and they often offer higher interest rates on savings and CDs.
Community banks and credit unions can be another option too. They offer many of the same benefits as online banks, like lower fees and higher interest rates, with the bonus of in-person service.
Bottom Line
In short, smart money management is all about simple steps and smart choices. Keeping an eye on your daily expenses, shopping with a plan, and leveraging financial tools like cash-back credit cards can boost your savings.
Small habits, like making coffee at home, can lead to big savings over time. Set clear goals, minimize fees, and remember, every little bit helps. Stick with it, and you’ll see your savings pile up. It’s rewarding to watch your financial savvy pay off, so let’s get started on this journey together!
Emotion regulation: Engaging deeply in an enjoyable activity boosts your mood and generates positive emotions, which in turn strengthens your ability to manage stress and navigate difficult emotions. It helps maintain emotional balance, which is beneficial when making investment and spending decisions. Being calm means you’re less likely to react impulsively with your money, leading to fewer costly mistakes. This emotional steadiness leads to thoughtful financial choices.
Fulfillment and happiness: Flow can bring enjoyment to what you’re doing, making the activity rewarding. Csikszentmihalyi’s research indicates that flow can contribute to increased happiness and overall life contentment. Budgeting to have more of these moments can lead to lasting life satisfaction.
How money can make you happy
You’ve likely heard that money is a tool. While that’s true, using money as a tool for happiness can be challenging. We attach so many emotions and meanings to money that it can be hard to separate them. However, that shouldn’t deter us from using money to mindfully invest in engaging, joyful activities and experiences that create moments of flow.
How to use flow for a better relationship with money
A musician I know named Greg says he’s always been grounded by music. He was born deaf, and a successful surgery at the age of two unlocked sound for him. He has embraced music ever since. By his early 20s, Greg had learned to sing, write music and play the guitar. He performed at local gigs and on international stages. Yet, as he became more and more successful, accomplishing the stardom he always thought would make him happy, he felt drained by his music label’s relentless push for commercial hits, which diminished his drive for creating artful and meaningful music.
Greg went to Hawaii for a year-long reprieve and rediscovered flow in music. He looked back at his “best” performances, where he felt deep flow states, and recognized that it didn’t happen at sold-out shows. Instead of pursuing commercial success, he focused on making music at private workshops, writing songs for people, and performing at wellness and yoga festivals.
Now, more than 20 years later, Greg’s life is filled with flow moments that involve his music. In Hawaii, he built a life with meaning and purpose. It’s no longer about chasing success, money and big hits.
His new life comes with challenges, of course, especially when it comes to finances. And when I asked Greg if he would change anything, he responded with a big smile: “Would I like more money? Sure, but I wouldn’t change a thing. My [happiness] bank account is through the roof. I have a great life.”
How to invest in self-care and flow states
The takeaways from Greg’s example and Csikszentmihalyi’s research are to integrate more flow states into our lives (and ultimately our finances) by doing the following steps:
Write out the activities you find flow in. What are you doing when you feel in the zone? What captures your full attention? List the activities and think about how to prioritize them in your life.
Budget for flow moments. Dedicate money to these activities you truly love. Think of it as investing in your well-being. Cut out activities you’re doing just because you think you should be doing them.
Be smart with your self-care choices. Balance flow with your need for financial security—they’re not mutually exclusive. Don’t risk essential expenses for flow states. However, you can still evaluate your expenses (housing, transportation, food, etc.) to discover ways to decrease those costs.
Don’t do it alone. Sharing your flow experiences with others can deepen them. Can you join or create a group aligned with your interests?
Reflect and adjust. Just like you do with your annual budget or investing portfolio, regularly check in on your flows. Reassess how your spending affects your ability to achieve flow. Be flexible and reasonable, and adjust as needed.
Why should you care about flow? If you care about your money, you will
When reflecting on our lives, we hope that when our time on this Earth is over, we can say, “I did it. I lived a good life.” Of course, a “good life” doesn’t mean it was easy—life is always full of challenges, obstacles and setbacks. But scientific research shows that the more we invest in our well-being, the more resilience we have during challenging times. Flow states offer us emotional regulation and life satisfaction.
By intentionally spending time and money on areas in our life that bring flow and happiness, perhaps we can experience not just how money makes the world go around, but also how we can use it to sing and dance a little more.
When managing your finances, consider things such as paying down debt, establishing an emergency fund, saving for the future and creating a fund for discretionary costs, also known as a fun or sinking fund.
1. Build an emergency fund
Before the fun fund, Lichtman says to prioritize an emergency fund. An emergency fund is strictly for worst-case scenarios such as job loss, unexpected car or home repairs (not renovations), or medical, dental and vet bills. Most financial experts recommend saving three to six months of expenses. Experts suggest three months of savings if job security is high, but try for six months if you’re self-employed or your job security is uncertain.
2. Pay off high-interest debt
Next, it’s essential to focus on managing credit card debt. According to a report from StatCan, Canadians aged 35 and younger carry an average of $2,000 for credit cards and instalment payments and $12,500 for student loans. Their total debt average is $19,000, which includes other bills and obligations, such as car loans and lines of credit.
It’s best to focus on clearing debt (credit cards, student loans etc.) before putting money toward long-term investing in a registered retirement savings plan (RRSP) or tax-free savings account (TFSA). Retirement plans can wait. “Don’t worry about putting money into your TFSA or RRSPs at this point because we need to zero in and focus on one thing,” Lichtman explains. “If you have three credit cards and want to pay off all three simultaneously, it’s unrealistic. Pay off one first and then get to the other two.”
3. Build a sinking fund
Now for the good part: how to save money fast for a fun life. If you’re like most people, you’ll have to reverse how you currently afford entertainment. Lichtman says the key is calculating and separating your fun fund upfront.
Regardless of income, having a clear plan for both fixed and discretionary expenses is key.For example, suppose a household has $6,000 in income and $4,000 in fixed costs. In that case, Lichtman helps them allocate the remaining $2,000 for discretionary spending at the beginning of the month—covering spending on groceries, dining out, food delivery, coffee and entertainment. This proactive approach allows for better financial management.
Choose a high-interest savings account (HISA) for your sinking fund. That way, you can earn interest on your savings (and interest on the interest—that’s called compound interest. Check out MoneySense’s compound interest calculator). It’s also a good option for your emergency fund. Just keep the accounts separate.
Money-saving tips
So, let’s take the above scenario and assume you have $2,000 for discretionary spending and remove non-negotiables like groceries. If you typically spend $1,000 monthly on groceries (the average monthly spend on groceries in Canada was $1,357.37 in 2023), you have $1,000 left for eating out, personal expenses and leisure experiences.
Opinions expressed by Entrepreneur contributors are their own.
New Year’s is a time when people set unrealistic goals, ones that mostly have to do with dieting or fitness. But if you’re practical, a great way to start the year is by setting realistic goals that you can actually maintain.
A great place to start is with your finances. Although financial resolutions may sound hard, they are easier than you think. Here are some tips and tricks to keep your banking and money in check this year.
Your credit score is your financial reputation, and this is the year to work on building it up. No matter what your score is, there is always room for improvement. So much goes into a credit score, including timeliness, usage, limit, inquiries, etc. So, focus more on minimizing your debts rather than on opening new accounts and spending up to your limit without paying back. By slowly adjusting your credit habits, you will start to see a positive change in your score.
2. On-time payments
This year is all about making your credit card or other loan payments on time. More often than not, people do not understand how important on-time payments are and what they can mean for their credit score. A huge part of credit is timeliness, and it becomes a large factor in raising or lowering your credit. Paying on time does not have to be a huge task either! Automatic payments can be your best friend. They make sure that your accounts are paid without having to think or do much.
3. Organize and budget your spending
Unlike last year, you should start writing down and accounting for every dollar in and out of your accounts. While this may sound redundant and boring, writing out the numbers can help you see where all your money is going. This will allow you to categorize your spending and see exactly where you can cut costs and budget. By keeping track, you won’t recklessly spend and will be aware of what is always coming in and out of your accounts.
4. Save! Save! Save! …. in a savings account
Everyone loves to discuss their savings and how they are always putting money away for the future. This does not have to be intimidating. After breaking down your spending, you’ll be able to easily see how much you can save. This amount does not have to be an extreme or high number, it can be something small that will build up over time. If you put $20 each week, you’ll have over $1,000 saved by the end of the year. With that, you can open a high-yield savings account that will earn you interest on the money you keep in the savings. This will not only help you save but also give you a return on saving.
If Covid taught us anything, it’s that investing in different things can help you in the long run. While you don’t need to be an expert in the stock market or a crypto specialist, looking into different ways you can invest your money and diversify your portfolio may help build up your finances. But beware, investing is not a guarantee — make sure to not put your entire savings and trust into the markets.
6. Fewer inquiries in 2024
Many people believe that the more credit cards they have, the better their financial situation will be. Well, that is not technically the truth. While having several lines of credit may be nice and useful, every time a credit card company makes an inquiry on your profile, they report it to the credit bureau. In turn, this can negatively impact your score by bringing it down. This year, we want to improve your score, not lower it! So, stop shopping for more cards and focus on using the card(s) you currently have.
7. Improve your knowledge
Start making yourself familiar with the world of finance. You should not have to depend on someone else to give you advice on the best ways to save or spend your money. Find time to read more about credit cards, banking, investing, etc. Although it may seem boring, it can actually be very interesting to learn more about what you can do with your money to set yourself up for success. Make this year about becoming financially independent and confident in your financial decisions.
If you have learned anything from 2023, it’s that side hustles are the new normal. People everywhere have been finding new ways to bring in a new stream of income passively or actively. This can help you give yourself a little more breathing room if money is a little tight, or it can be a great way to contribute to a savings account. There are plenty of websites and articles with examples of different hustles that you can start doing to build up your income.
By doing all of this, or even just one, you can drastically change your financial position in 2024. Whether it’s improving your spending habits or saving more money, any of these tips can help bring you closer to financial freedom and success this year. Small adjustments can result in the biggest changes.
Opinions expressed by Entrepreneur contributors are their own.
Let’s cut to the chase and talk about something that’s hitting our wallets hard – consumer credit. The numbers don’t lie: Consumer credit is not just bad; it’s getting worse by the day.
Credit card debt: It’s now at an unprecedented $1.03 trillion.
Other loans and retail credit cards: There’s been a $15 billion increase.
Auto loans: These have risen by $20 billion, totaling $179 trillion.
Interest rates: We’re seeing an average of 20.53%, the highest in 22 years.
Now, despite these sky-high figures, something curious is happening: Delinquency rates are staying low. This means many households are still juggling their debt effectively. But hey, if the economic winds shift, we could be looking at some real trouble.
Your credit score and consumer debt are like peanut butter and jelly — they just go together. Your score is influenced by payment history, credit utilization and new credit inquiries. Let’s break it down:
Payment history: This is a biggie, making up 35% of your FICO score. Regular, timely payments are your best friend here, boosting your credit. But with debts rising, those monthly payments are also climbing. Missed payments? They’ll ding your credit score for up to seven years.
Credit utilization: Accounting for about 30% of your credit score, this is all about how much credit you’re using versus what you’ve got available. As your debts pile up, so does your credit utilization. Crossing that 30% threshold can start to hurt your score.
New credit inquiries: Applying for new credit cards or loans? That can temporarily lower your score. Be strategic about when and how often you apply for new credit.
Smart debt management
Here’s where we get proactive. You’ve got options like the Avalanche Method, where you tackle debts with the highest interest rates first. Or, try the Snowball Method, knocking out the smallest balances first for quick wins. Both have their merits, depending on your style.
Then there’s debt consolidation. Combine all those pesky debts into one, ideally with a lower interest rate. It’s about simplifying your life and potentially reducing interest costs over time.
And remember, if you pay off a credit card, think twice before closing the account. Why? It can actually hike up your credit utilization ratio and ding your score. Keep those accounts open with a zero balance to keep your credit in good shape.
Debt’s bigger picture
Consumer debt isn’t just about numbers on a screen. It’s about life. High debt payments can eat into your ability to save, impacting your financial future. And if we’re all spending less on the fun stuff, that can ripple out and hit the economy too. Before you know it, we’re staring down the barrel of a recession.
Now, let’s not forget the personal toll. Debt stress is real. It messes with your sleep, strains your relationships and can put major life decisions like buying a home or starting a family on pause. The moral of the story? It’s not just about dollars and cents; it’s about your well-being.
So, how do you steer clear of the debt trap? Let me lay out three key tools to help you conquer your debt:
1. Calculate Your CLR: Your Consumer Leverage Ratio (CLR) is the ratio of your monthly consumer debt to your disposable income. If it’s over 20%, you need to hit the brakes and focus on debt reduction.
How to calculate: To calculate your CLR, divide the total balance of your credit card debt by your total credit limit. For instance, if you have a total credit card debt of $5,000 and a total credit limit of $25,000 across all cards, your CLR is $5,000 ÷ $25,000, which equals 0.20 or 20%.
2. Prioritize debt repayment: Start by targeting those high-interest debts. Use either the Avalanche or Snowballmethod to get ahead. Paying off these debts not only improves your financial health but also boosts your peace of mind.
How to implement: List out all your debts in order of their interest rates, from highest to lowest. Continue making minimum payments on all your debts, but direct any extra money you can afford toward the debt with the highest interest rate. Once the highest-interest debt is fully paid, focus on the next highest, and so on.
3. Monitor your spending: Keep an eagle eye on where your cash is going. Use apps or good old-fashioned spreadsheets to track your expenses. Look for areas to cut back on luxuries, so you can channel more funds toward debt repayment and savings.
How to monitor: You can use budgeting apps, spreadsheets or traditional accounting methods to track your spending. Categorize your expenses into necessities (like rent, utilities, groceries, etc.) and luxuries (like dining out, entertainment, etc.).
Credit utilization isn’t just some fancy financial term; it’s a wake-up call to all of us trying to navigate this tough financial landscape. Listen, the state of consumer credit is alarming, and it’s time we took the reins. By understanding and managing your credit utilization, you’re not just boosting your credit score; you’re building a fortress against the rising tide of debt. Remember, it’s not about the credit you have; it’s about how smartly you use it. Stay sharp, keep your utilization low, and make those smart financial moves!
The fintech sector has transformed the personal credit business, making unsecured personal loans more accessible and feasible for a broader spectrum of customers. Through the internet, marketplace lending, and continuous online access, the fintech movement has turned unsecured personal loans into a progressively viable solution for low-and moderate-income (LMI) borrowers. As a result, these borrowers now have a wider range of cost-effective options to choose from when seeking credit, enabling them to improve their financial circumstances and build a stronger credit history.
The Fintech Revolution in Personal Credit
The innovative technologies employed by fintech companies have streamlined loan application processes, reduced approval times, and provided a more transparent lending experience that caters to the unique financial needs of LMI borrowers. This expansion has directly impacted the banking sector, as demonstrated by LendingClub and SoFi’s acquisition of banks.
Unsecured Personal Loan Industry: Growing Concerns and Rising Demand
Concerns about the unsecured personal loan industry have grown as US consumer credit card debt exceeds $1 trillion. As a result, regulators are paying closer attention to lending practices, and financial institutions are scrutinizing borrowers more rigorously. Simultaneously, consumers are seeking alternative lending options, driving growth in the fintech sector and propelling digital lending platforms to the forefront.
Challenges and Obstacles: Addressing the Market’s Escalating Issues
With increasing demand for these loans among LMI customers, the market faces escalating issues like rising costs, stricter standards, and growing delinquency rates. As a result, financial institutions and policymakers need to work together to address these obstacles and create solutions that protect both consumers and the industry. By fostering an environment of responsible lending practices and effective regulations, there is an opportunity to make these loans more accessible and beneficial for LMI communities.
Navigating the Complex Financial Landscape: Cooperation and Communication
As borrowers seek help in managing their financial affairs, both consumers and lenders must work their way through an ever-more complicated and uncertain landscape. Navigating this intricate financial terrain requires increased communication and cooperation between borrowers and lenders to ensure mutually beneficial outcomes. It is essential for both parties to stay informed about changing regulations, market conditions, and available resources in order to make well-informed decisions and maintain stability.
Conclusion: The Future of Unsecured Personal Loans in the Fintech Era
The fintech sector’s impact on the unsecured personal loan industry has, undoubtedly, been transformative for LMI borrowers, providing them with more accessible and cost-effective options. However, as the market evolves and policymakers implement stricter regulations, the industry must continue to innovate and adapt to its ever-changing environment. Through collaboration, communication, and responsible lending practices, the unsecured personal loan industry can continue to serve the needs of LMI borrowers while maintaining financial stability.
The humanitarian crises taking lives and garnering headlines are heart-wrenching—particularly for Canadians who have family and friends in the affected regions. More broadly, no one knows for sure how these crises will affect global economies, access to resources and financial markets. It’s understandable that investors are scared and making investment decisions based on their fear. Some people are selling their equities and leaving the markets. As an advisor, it’s my job to help take the emotion out of investing.
We know from previous wars, terrorist attacks, pandemics and other terrible events that people, governments and markets are resilient, and can even become stronger than they were before. This happened after 9/11, the global financial crisis and the global COVID-19 pandemic. The historical evidence suggests that the best thing investors can do when the world experiences a crisis is to separate feelings about the tragedy from the facts about the businesses you’re invested in and look for buying opportunities.
Impact of global crises on investments
The impact of wars and other traumatic events on the markets tend to be relatively short-lived. That’s because unlike fiscal policy—such as raising interest rates—the events themselves are not “economic” in nature.
For example, if war breaks out in an oil-producing country, will that affect the price of oil? Theoretically, it shouldn’t, because other, larger producers can offset any lost supply from the war-torn country.
But, as we know, perception can be more powerful than reality when it comes to the stock market. The initial, automatic reaction could be a spike in oil prices—and then prices should adjust with time.
What is a Canadian investor to do?
So, what do you do as an investor in Canada? Not an awful lot. As investment advisors, we get paid to grow people’s wealth. When markets sell off for reasons that are more temporary than related to economics and performance, it’s important to take emotion out of decision-making and not go into panic mode about your investments.
Markets may dip, but they don’t usually collapse. It’s possible your portfolio’s value may drop for a period of time. In the past, after a crisis has ended—and regardless of the outcome—the markets have regained stability, and investment returns have bounced back.
A crisis investment strategy
My best advice in the face of a world crisis: Stay calm, take a deep breath and focus on the fundamentals. Keep your risk profile front and centre, and think about where you want to put your money. My approach is to be sector agnostic and look for good value wherever I can find it.
Credit Card churning is a rewarding practice if you can effectively manage the risks and challenges it presents.However, it’s essential to approach it with a responsible and informed mindset.
Credit Card churning is a practice that has gained popularity among savvy consumers looking to make the most of their Credit Card spending. It involves strategically opening and closing Credit Card accounts to take advantage of welcome bonuses, rewards programmes, and other perks offered by Credit Card issuers.
When done correctly, Credit Card churning can help you earn significant rewards and save money on your expenses. However, it’s not without its risks and requires careful planning and responsible financial management. Buckle up as we explore the art of Credit Card churning, how it works, its benefits, and the potential pitfalls to avoid.
Credit Card churning, often referred to as “churning” or “app-o-rama,” is the practice of systematically opening new Credit Card accounts, typically with the intention of earning the sign-up bonuses offered by card issuers. These bonuses can include cashback, points, miles, or other incentives that cardholders can redeem for travel, merchandise, or statement credits.
The process typically involves the following steps:
Research: Churners meticulously research various Credit Card offers to identify those with the most attractive sign-up bonuses, rewards programmes, and perks.
Apply: After identifying promising cards, they submit applications for multiple Credit Cards within a short timeframe, often referred to as an “application spree.”
Meet Spending Requirements: Churners strive to meet the spending requirements needed to unlock the sign-up bonuses. This may involve making everyday purchases or shifting expenses to the new cards.
Collect Rewards: Once the spending threshold is met, cardholders collect the rewards, which can vary widely based on the card’s terms.
Evaluate and Repeat: After earning the bonuses, churners evaluate the ongoing value of the card, considering annual fees and benefits. If the card is no longer worthwhile, they may close the account and start the process again.
Credit Card churning offers a range of benefits for those who can manage it responsibly:
Sign-up Bonuses: The most significant advantage of Credit Card churning is the sign-up bonuses, which can be quite generous. Depending on the card, these bonuses can equate to hundreds or even thousands of rupees in rewards, making it a lucrative pursuit for those who can meet the spending requirements.
Reward Accumulation: Churners can amass a considerable number of reward points, miles, or cashback, which they can use to offset expenses or enjoy luxury experiences. Travel enthusiasts can particularly benefit from accumulating miles and points, which can be used for flights, hotel stays, and more.
Cost Savings: Churning can lead to substantial cost savings by taking advantage of statement credits, free hotel stays, or travel insurance, which are common benefits offered by premium Credit Cards.
Flexibility: Credit Card churning allows you to tailor your rewards to your specific interests and lifestyle. Whether it’s earning cashback on everyday purchases, accumulating points for travel, or receiving discounts on specific retailers, there is a card for nearly every preference.
While Credit Card churning can be a rewarding pursuit, it’s not without its risks and challenges. Here are some of the potential pitfalls that churners should be aware of:
Credit Score Impact: Opening and closing multiple Credit Cards in a short period can negatively affect your Credit Score. New applications lead to hard inquiries on your credit report, which can lower your score temporarily. Additionally, closing accounts can affect your credit utilisation ratio.
Annual Fees: Many Credit Cards with lucrative sign-up bonuses come with annual fees. If you don’t use the card enough or don’t take advantage of its benefits, you might end up paying more in fees than you gain in rewards.
Churning Burnout: Churning requires careful management, organisation, and planning. Some individuals can experience “churning burnout” as they struggle to meet the spending requirements for multiple cards simultaneously.
Financial Responsibility: Credit Card churning is not suitable for individuals who have difficulty managing their finances responsibly. Overspending to meet bonus requirements can lead to debt and interest charges, negating the benefits of churning.
Issuer Restrictions: Some Credit Card issuers may have implemented restrictions to prevent churning. They may limit the number of cards you can open in a specific time frame or restrict access to sign-up bonuses if you’ve already received them from a similar card.
Credit Card churning is a rewarding practice for those who can effectively manage the risks and challenges it presents. By strategically opening and closing Credit Card accounts, you can earn generous sign-up bonuses, accumulate valuable rewards, and save money on expenses. However, it’s essential to approach Credit Card churning with a responsible and informed mindset.
Careful research, financial discipline, and a willingness to adapt to changing circumstances are all crucial to success in the world of Credit Card churning. When done right, it can be a lucrative way to make the most of your everyday spending and turn it into valuable rewards.
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Opinions expressed by Entrepreneur contributors are their own.
An entrepreneurial mindset encourages individuals to view their personal finances as an opportunity for wealth creation and growth. This mindset emphasizes the importance of investing, whether in stocks, real estate, or other assets, to generate passive income and build wealth over time. That being said, developing your own foundational belief systems around your relationship with money is just as important as the financial vehicles themselves.
One should remember that financial literacy is a journey, and it requires consistent effort, practice and application of these foundational principles to enhance your understanding and improve your financial wellbeing. When it comes to money, adopting certain mindset philosophies can help shape your relationship with wealth creation and guide your decision-making. Here are five imperative viewpoints to consider:
1. View money as you would view a current
While the term “currency” is derived from the Latin word “currere,” which means “to run” or “to flow,” the concept of money flowing like a current is metaphorical rather than a literal representation. The term “currency” primarily refers to a system of money that is used as a medium of exchange for goods and services.
However, the metaphor of money flowing like a current can be used to describe the dynamic nature of money and its movement within an economy. Money circulates through various transactions, changing hands from one individual or entity to another. It flows through the economy, enabling economic activity and facilitating trade.
Similar to a current in a river, money is constantly in motion, connecting different participants in the economy. It can be earned, spent, invested, and transferred, creating a continuous cycle of transactions and economic interactions.
This metaphor highlights the importance of understanding and managing the flow of money. Just as currents in a river can be strong or weak, money can fluctuate in terms of its availability, value, and the speed at which it circulates. By being aware of this flow and managing their finances effectively, individuals and businesses can navigate the economic currents and make the most of their financial resources.
2- Don’t allow the limits of your past to have any bearing on your future
Embracing an abundance mindset involves believing that there are plentiful opportunities for wealth and success. It is about focusing on possibilities rather than limitations. With this mindset, you approach money with a positive and optimistic outlook, recognizing that there is enough for everyone and that your financial situation can improve through hard work, smart choices and abundance mindset-based actions.
Many emerging thought leaders have recently endorsed the ideology of “mindset monetization.” With these new, but logical shifts, countless case studies across the nation validate that financial empowerment begins with shifting your paradigm. And thus, by challenging the rigid, conservative “work, spend, save” 9-5 mindset and evolving from thinking like an entrepreneur rather than an employee, one can drastically uplevel their monetary milestones.
3. Pivot — don’t pause
The philosophy of financial independence centers around achieving freedom and control over your finances. It involves building a solid financial foundation that allows you to support yourself and pursue your desired lifestyle without being reliant on others. This mindset encourages you to take ownership of your financial situation, prioritize saving and investing, and develop multiple streams of income.
Take the pandemic, for example; leaders who adopted remote skills, studied macroeconomics and understood what sectors were poised for growth not only weathered the pandemic but significantly improved their business and personal growth.
4. Continuous learning to stay updated on the latest financial trends
An entrepreneurial mindset prioritizes continuous learning and improvement. When it comes to financial literacy, this means actively seeking out resources, courses, and information to enhance your understanding of financial concepts, investment strategies and personal finance management. The post-Covid era has democratized online certifications from individual subject matter experts to academic institutions, so there is now a level playing field regardless of your geographical standpoint. Engaging in lifelong learning allows you to stay updated with the latest financial trends and adapt your financial strategies accordingly.
The philosophy of delayed gratification, in tandem with a commitment to learning, involves prioritizing long-term goals over immediate satisfaction. It requires resisting impulsive spending and prioritizing saving and investing for future financial security and goals. By delaying gratification, you can make wiser financial choices, avoid unnecessary debt, and accumulate wealth over time.
Mindful spending involves being intentional and conscious about how you allocate your financial resources. It means aligning your spending with your values and priorities as well as the emerging, lucrative sectors that require attention. With this mindset, you take the time to evaluate your needs versus wants, track your expenses, and make deliberate decisions that reflect your financial goals. Mindful spending helps you avoid impulsive purchases, stay within your budget and make more conscious choices with your money.
Opinions expressed by Entrepreneur contributors are their own.
Taxes aren’t just a once-a-year phenomenon. Filing taxes begins with a plan and a daily routine. If your goal is to learn a language so you can visit a foreign country, learning in small, easy-to-digest segments makes it easy to absorb and retain. When you finally take your trip, it’s that much more rewarding.
The same is true of taxes. Attacking them in the handful of days before they’re due is a formula for stress, error and failure. Breaking down tax-related recordkeeping and related tasks into smaller segments, such as reviewing receipts and invoices an hour a week, makes the process more manageable and less overwhelming. Keeping taxes on your radar all year can even be good for your overall finances.
Have you ever skipped mowing your lawn for a few weeks? Suddenly, it’s up to your knees, the grass gets stuck in your blades and it takes way longer than it should. The same is true of handling your tax-related finances. If you document and file your receipts and invoices when they’re fresh in your mind, they’re easy to account for properly. That’s why you should look at them regularly — how regularly will depend on how much work there is. I recommend looking at everything at least once a month, but if you’re doing a lot of business, you may want to do it every two weeks or even weekly. Just make it part of your routine.
An excellent way to handle that is to write down an appointment in your business calendar. Writing it down will help in multiple ways. You should also physically write down what you must address at each session.
When you do that, you can also use the information to look forward. This can be really useful if your income differs from month to month. By seeing what you brought in in the past month, you can:
Get a better idea of what your year-end income will be.
See whether you may fall short and address that before it’s a severe problem.
Know which clients are your best.
When you know whether your year-end income looks like it will be much different from your previous year or what you expected, you can make plans to have money ready to pay at the end of the year or make adjustments to your estimated tax payments.
If you find you’ll have more money than you expect, it also provides an opportunity to make investments. You can buy something that will help the business — or even take a larger share home.
Don’t lose the paperwork
Your routine attention to tax-related paperwork will pay off at tax time. This is true whether you’ll be doing the filing, an employee will or a tax accountant will. Record the expenses that will count as deductions at your regular session closest to when they happen. This will include regular outlays such as rent; variable outlays such as utilities or internet (note the Internal Revenue Service rules if you’re declaring the costs for a home office versus a traditional office or facility); and your business phone. One of the easiest expenses to lose track of is business mileage. Entering mileage and the reason for travel will make things easier when it’s time to file.
This is where a document management system (DMS) will help. When your business calendar says it’s time to attend to your tax-related recordkeeping, you only need to capture all the relevant documents. Whether it’s an invoice, a checking account statement, a receipt or any other support you’ll need for the IRS, the best DMS will pull all the data in.
Leveraging optical character reading (OCR), such a solution will work from cell phone photographs, existing computer files and email attachments. Then, once the data are stored in the cloud, you can categorize your paperwork by type and manipulate them to produce reports you can use, such as expense or income statements. These also reduce errors that make the IRS unhappy and can result in fines and penalties. And, should the IRS wish to conduct an audit, all of those data will be easily accessible and organized. The IRS even prefers electronic records.
Productivity experts from David Allen to Tony Robbins and publications like Harvard Business Review and Psychology Today have pointed out that the best way to accomplish a large task is to break it down into smaller ones. Short, productive bursts of time will move you inexorably to the finish line as the year progresses. Visual cues, like a Post-It note on your computer, can help you make year-round tax record management a habit. Be specific about your tasks. Mnemonics help; maybe “Taco Tuesday” becomes “Tax Record Tuesday.” With almost no pain, you’ll be prepared when tax season begins. While the procrastinators around you are pulling at their hair and biting their nails, you’ll be doing things directly relevant to your business — with every hair in place and nails intact.
Opinions expressed by Entrepreneur contributors are their own.
There are several reasons why Americans may lack in financial literacy. That is why I decided to write the financial literacy book entitled Woke Doesn’t Mean Broke. It is a 688-page financial bible. Most Americans have a limited education. Many schools do not prioritize financial literacy education in their curriculum. As a result, individuals may not receive formal education on financial topics, leaving them ill-prepared to navigate complex financial decisions. Lack of access to resources also comes into play.
Some individuals may not have access to resources and tools that promote financial literacy, such as personal finance courses, books or online platforms. Limited access to financial education materials can hinder the development of financial knowledge and skills. There are also cultural factors and cultural attitudes around money and financial discussions that can influence financial literacy levels. In some cultures, discussing personal finances openly may be considered taboo or impolite.
The financial industry can be complex, with various products, services and regulations. Understanding financial jargon, investment options or retirement planning can be challenging for individuals without a strong financial background. Lack of personal finance role models plays a big role. Individuals who grow up without positive financial role models may struggle to develop good financial habits and may not have access to guidance or support in managing their finances effectively. A culture that prioritizes immediate consumption and instant gratification can contribute to poor financial habits, such as overspending, relying on credit and not prioritizing long-term financial goals.
Most Americans have high levels of consumer debt. Individuals burdened by debt may focus on managing immediate financial obligations rather than developing broader financial literacy skills. Some individuals may lack confidence in their ability to understand and manage personal finances. Financial topics can be intimidating, and individuals may feel overwhelmed or embarrassed to seek help or admit their lack of knowledge.
Addressing the lack of financial literacy requires a multi-faceted approach that includes improvements in educational systems, increased access to financial resources and tools, cultural shifts in attitudes toward money and targeted efforts to promote financial education and awareness. Encouraging open discussions about personal finance, providing accessible financial education resources and promoting financial literacy initiatives can all contribute to improving financial literacy levels among Americans.
Financial literacy refers to the knowledge and understanding of various financial concepts, tools and practices that enable individuals to make informed decisions about their personal finances.
Being financially literate
Being financially literate involves having skills and knowledge in the following areas:
Budgeting: Creating and maintaining a budget to track income, expenses and savings and ensuring that spending aligns with financial goals.
Debt management: Understanding different types of debt, interest rates, repayment options and strategies for managing and reducing debt effectively.
Saving and investing: Understanding the importance of saving money and making informed decisions about investment options, such as stocks, bonds, mutual funds and retirement accounts.
Financial goal-setting: Setting short-term and long-term financial goals and developing strategies to achieve them, such as saving for emergencies, education, homeownership or retirement.
Banking and financial services: Understanding banking products, such as checking and savings accounts, credit cards, loans and mortgages — and knowing how to choose the right financial services that meet individual needs.
Insurance and risk management: Understanding the purpose and importance of insurance — including health, life, home and auto insurance — and assessing risk management strategies to protect against unexpected financial losses.
Taxation: Understanding basic tax principles and obligations, including filing tax returns, deductions, credits and tax-efficient strategies for saving and investing.
Consumer rights and responsibilities: Knowing consumer rights, understanding financial agreements and contracts, and making informed decisions when purchasing goods and services.
Financial literacy empowers individuals to make informed financial decisions, achieve financial stability and work towards long-term financial well-being. It equips people with the knowledge and skills to navigate the complexities of the financial world, avoid common pitfalls and make choices that align with their financial goals and values.
5 tools to help improve your understanding and management of personal finances
1. Personal finance apps: Utilize personal finance apps such as Mint, Personal Capital or YNAB (You Need a Budget). These apps help you track your income, expenses and savings goals, providing insights into your spending habits and offering budgeting tools. They often offer visualizations, alerts and goal-setting features to enhance financial awareness and encourage better money management.
2. Online courses and educational platforms: Take advantage of online courses and educational platforms dedicated to improving financial literacy. Websites like Coursera, Khan Academy and Udemy offer courses on various financial topics, including budgeting, investing, debt management and retirement planning. These courses provide structured learning and practical knowledge to enhance your financial literacy.
3. Financial literacy websites and blogs: Explore reputable financial literacy websites and blogs like Investopedia, The Balance or NerdWallet. These platforms offer comprehensive guides, articles and resources covering a wide range of financial topics. They can help you understand key concepts, terminology and best practices related to budgeting, saving, investing and more.
4. Personal finance books: Dive into personal finance books written by experts in the field. Titles like Rich Dad Poor Dad by Robert Kiyosaki, The Total Money Makeover by Dave Ramsey and The Intelligent Investor by Benjamin Graham provide valuable insights and practical advice on building wealth, managing debt and making sound investment decisions. Reading these books can broaden your financial knowledge and help you develop a solid foundation for financial literacy.
5. Financial planning tools: Utilize financial planning tools like retirement calculators, investment calculators and debt payoff calculators. Websites and apps such as SmartAsset, Vanguard or Bankrate offer these tools to help you plan for specific financial goals. They enable you to evaluate different scenarios, understand the impact of your financial decisions and make informed choices based on your current situation and future aspirations.
Remember, it’s important to combine these tools with ongoing self-education, practice and seeking advice from financial professionals when necessary. Building financial literacy is a continuous process that requires consistent effort, discipline and a willingness to learn.
Opinions expressed by Entrepreneur contributors are their own.
It’s a common mistake made in adolescence: bleaching one’s hair to look unique. Those who achieve the envisioned look are few and far between, as the proper at-home technique evades most of us, leaving us to tell the tale of a period in life during which we sported preposterously orange hair.
Thankfully life grants us wisdom (and a collection of funny stories) as we age. We learn that nailing a unique vision requires tremendous study, discipline and teamwork. It takes time to create something distinctive. And gaining wisdom doesn’t mean you have to lose your flair for the unique: it just means you’ve got a better eye for the solutions and processes that’ll get you to your goal.
While hair couture is a fascinating topic — and apropos to leaving a distinctive mark on the world – today I’d like to take a look at one of the fundamental elements behind creating an exceptionally successful business: the Accounts Payable (AP) process. Leveraging the right AP solution that perfectly aligns with your business’s unique vision and resources will ensure your company grows without compromising its individuality.
Why choosing an AP solution that aligns with your vision is a must
The urge to start or run a business stem from a creative place. Thankfully, the fundamental processes that run a business have come a long way, making it more possible than ever to make entrepreneurial visions a reality. The Accounts Payable process is one such fundamental element of a successful venture. Accounts Payable (AP) tracks and monitors the expenses owed by a company to its suppliers and vendors, which is crucial in managing the overall budget.
Each business has unique needs — and the AP process should suit their individual situation. Top-rated automation solutions for AP allow organizations to do the tailoring they need. For example, multisite organizations — like in the construction business or the B2B service industry — would benefit from Cloud-based Accounts Payable automation, as this allows for the capturing, processing, approval, and payment of invoices from any approved device at any location, with multiple and complex validation rules and routes (if you’ve worked on a construction project before, you know there’s often a lot of movement amongst sites). Additionally, Cloud-based AP automation can track and reconcile orders, retention status, and lien waivers as they flow in from vendors, subcontractors and suppliers.
Another example of industries that thrive with customizable AP software is the industries where maximizing customer-facing time is key for satisfaction and business growth. In a fast-moving restaurant, in a retail store, in a consulting business, there’s no time for manual mistakes. A fully-automated, no-touch AP process can significantly lessen the incidence of human error around the many business transactions flowing back and forth on a given day, streamlining and centralizing the purchase-to-pay (P2P) process and others pertaining to spending and suppliers. A customizable, seamless AP automation software can free these businesses up to focus on the distinctive elements that make their business special – like the food and customer experience for example.
The majority of businesses, large and small, can benefit from implementing Accounts Payable automation and Purchase-to-Pay automation moving forward, suited to their budgetary goals and specific workflow configuration. The increased productivity, accelerated cycle and data accuracy heighten coordination and collaboration between departments, and easier compliance with regulations and standards granted by this intelligent software improves business operations. Beyond, it improves business leaders’ ability to predict cash flow and make better decisions as data automatically flow in real-time to their data analytics and data visualization tools.
What to look for in Accounts Payable software
Not all AP automation software is created equal. After determining your business needs and requirements around invoice processing, there are a few things to pay attention to when searching for the best Accounts Payable automation software for your business.
Seamless real-time automation: Ensure the Accounts Payable automation software syncs with your existing financial solutions and ERP system. You want your AP automation to act as a one-stop shop for invoicing and payment solutions. Some unique solutions leverage AI and machine and deep learning technologies to deliver an outstanding level of automation with extreme simplicity and traceability.
Simplicity: AP automation software should display user-friendliness, plug-and-play integration with existing IT systems, and unlimited flexibility in meeting evolving business operations needs. It should work for your business and not require a total restructuring of the systems you already have in place.
Scalability: A great AP automation software should be based on a pay-per-use model, and it should offer an all-in-one set of solutions, starting from invoice automation, then moving to automated invoice payment, then extending purchase automation. Rather than relying on a user-toll model, AP automation software should afford teams the flexibility and elegance of using only what they need to, when they need to. Elements such as customizable workflows, the ability to create codes to suit specific transaction needs, and Cloud-based integrations provide the end-to-end, structured dynamism necessary to meet the needs of your business as it evolves.
Choose an AP automation solution that’s as unique as you are
Running a business is labor-intensive. When it’s work you deeply care about, it’s a labor of love – and that means you’ll go above and beyond to find the processes and tools that bring your vision to life. Only a happy few automation software solutions will allow your team’s creative and innovative power to shine while preventing errors along the way. Market offering is wide, so it is crucial to make the right choice. Finding the right balance between automation, simplicity and functional scope is the only way to make your automated AP process suited to support the unique vision of your business. Just like finding the right hairstyle to suit your individuality, the right AP automation strategies will set the groundwork so your company can grow confidently without sacrificing what makes it unforgettable.
