Wednesday, December 6, 2023

There are plenty of major milestones in life that we can look forward to. Whether it’s graduating from post-secondary education, buying a house, getting married or retiring after years of a fulfilling career, we all need to plan accordingly. All of these major steps in life often require some financial planning to ensure you can effectively fund your dreams and maintain your financial health.

If you’re ever wondering when or how you should start saving, YNCU is here to lend a helping hand and give you a tailored strategy to achieve your goals.

We sat down with YNCU’s Sherri Atkinson — a Member Service Representative at the Trunk Road, Sault Ste. Marie branch, to learn how we can master saving smart for all stages of life.

1. Saving for post-secondary education

Going to post-secondary school, whether it’s a 6-month or 6-year program, can be a significant financial commitment. If you’re saving for yourself to go to school, some savings programs are smarter than others and can help take some of the burden off your shoulders when it comes time to pay your tuition or buy books.

Saving over a longer period of time is always beneficial and Sherri recommends setting up an automatic transfer into a savings account as soon as possible. You can set transfers to take place weekly, bi-weekly, monthly or quarterly — whatever fits your budget and lifestyle. Automatic transfers also take the brainpower out of saving and ensure you never forget to set some money aside.

Working with our advisors, we can take the pressure off of students when it comes to paying for school, leaving you time and energy to focus on your studies instead.

2. Saving after graduation

Once you’ve graduated and landed your first job, the newfound freedom and income can feel a little overwhelming. You likely have some student debt, but are looking to the future and are ready to start saving again. So, where do you start?

Sherri recommends you start to pay your loans down as soon as possible and set up a realistic payback plan that fits within your budget.

If you have extra money to set aside once each bill and loan payment has been made, then it’s time to focus on jump starting your emergency savings. By opening up a Tax Free Savings Account (TFSA), you can set money aside and earn interest tax free.

Finally, if you feel you have additional funds to set aside for future savings, it’s never too early to set up a Registered Retirement Savings Plan (RRSP) — a tax sheltered savings account specifically for retirement. It can feel overwhelming to save for so many things right out of school, so only begin to contribute to savings if you have the means and room in your budget to do so.

For additional support or information, you can always reach out to your YNCU advisor to see if you’re ready to jumpstart your savings as a new grad.

3. Saving up before you have kids

Having children is not only a massive time commitment (think 18 years … and then some!) but it is also a significant financial commitment.

When it’s time to bring a new member of the family into the world, Sherri suggests you start saving up for a few different expenses:

  • Daycare
  • Day-to-day supplies
  • Clothing and toys
  • Post-secondary education

Even before your baby is born, you can apply to open a Registered Education Savings Plan (RESP) — a tax sheltered savings account specifically for the expenses associated with post-secondary education. Setting up small contributions to start can make a world of a difference. By the time your child is ready to go to school, their RESP can help partially or fully cover their major expenses.

Finally, if you qualify for the monthly Ontario Child Benefit and have room in your budget, you can use this money to invest or save for your child’s future, meaning you are taking less money out of your income to save each month.

4. Saving for retirement

The first step to saving effectively for retirement is knowing how much money you will need to save by the time you plan to retire. Using YNCU’s Retirement Planner calculator, you can start to add your retirement savings into your monthly budget, which will set you up for success years down the line.

The earlier you start and the more you can save each year, the better. However, every little bit counts and will make a big difference in your retirement plan in the future.

Sherri recommends setting up automatic transfers into an RRSP and/or TFSA, so you won’t even notice the money has left your chequing account. Being mindful of your spending and cutting down on extravagant purchases can also make a difference in the future. For example, frequently purchasing a new vehicle, gambling your money or giving money away too often to charities, families, or friends are all major reasons why individuals report they are unable to save for retirement.

Saving smart doesn’t have to be complicated and at YNCU, our goal is to make it as simple and straightforward as possible. To get a head start on your retirement savings, reach out to a YNCU advisor to build a comprehensive financial plan and prepare yourself for retirement as soon as you can.

To get help on saving smart — no matter what stage of life you are in or are planning ahead for — find your local YNCU branch and reach out to an advisor to take control of your financial future, today.