by Hannah Johnson | Dec 12, 2023 | Financial Literacy
2023 in Review: Finance Edition
Tuesday, December 12, 2023
As we approach the end of 2023, let’s discuss what happened this year in the Canadian world of finance, what happened with our personal money management, and how we can improve our financial situation in 2024. It’s important to reflect on the year in all aspects of our lives, and how we can better plan for the future. In this blog, we will dive into the key highlights of the financial landscape in Canada for 2023 and provide some tips to help you plan your finances more effectively for 2024.
An Overview of the Financial Landscape in Canada in 2023
In 2023, Canada’s economy faced both challenges and opportunities. The global pandemic continued to impact various sectors, but there were also signs of recovery and growth. Here are some key highlights:
Investing in Technology: The finance industry embraced technology, with a surge in digital banking services, mobile payment platforms, and online investment options. Fintech startups flourished, providing innovative solutions for Canadians to manage their finances conveniently.
Real Estate Market Boom: The real estate market witnessed a significant surge in demand, leading to soaring housing prices in many parts of Canada. Low mortgage rates and increased immigration played a role in driving the market, but concerns about affordability and potential risks also emerged.
Inflation & Rising Interest Rates: In an era characterized by changing financial landscapes, the year 2023 proved to be no exception. It brought about increased interest rates and inflation in Canada, influencing everyone from young adults just starting their career to seasoned retirees which really limited people’s ability to save and invest.
Green Investments: Environmental sustainability gained traction, and the finance sector responded by promoting green investments. Sustainable funds and socially responsible investing became popular among Canadians looking to align their financial goals with their values.
Understanding Your Finances in 2023
Now that we have looked at the broader financial landscape in 2023, let’s shift our focus to your personal finances. It’s essential to understand how your financial situation was impacted by these developments. Here are some steps to help you figure out what happened with your finances in 2023:
1. Review Your Income and Expenses: Start by analyzing your income sources and tracking your expenses throughout the year. Consider any changes in your employment, investments, or other sources of income. This will give you a clear picture of how much you earned and spent in 2023.
2. Assess Investment Performance: If you invested in stocks, bonds, or mutual funds, review the performance of your portfolio. Did you achieve your financial goals? Identify any winners or losers and evaluate the overall return on investment.
3. Evaluate Debt and Savings: Examine your debt obligations, such as mortgages, loans, or credit card balances. Did you make progress in reducing your debts? Additionally, assess your savings and emergency funds. Were you able to set aside enough for unexpected expenses?
Better Planning for Your Finances in 2024
Armed with an understanding of your financial situation in 2023, it’s time to plan for the upcoming year. Here are some tips to help you better plan your finances for 2024:
Set Clear Financial Goals
Define your short-term and long-term financial goals. Whether it’s saving for a down payment, paying off debt, or planning for retirement, having specific goals can guide your financial decisions and motivate you to stay on track.
Create a Realistic Budget
Based on your income and expenses from 2023, create a budget that aligns with your financial goals. Include categories for savings, investments, and discretionary spending. Be mindful of any adjustments needed due to changing circumstances or lessons learned from the previous year.
Diversify Your Investments
Consider diversifying your investment portfolio to mitigate risks. Explore different asset classes such as stocks, bonds, real estate, or even alternative investments. Seek professional advice if needed to ensure your investments align with your risk tolerance and financial goals.
Strategies to Keep Up with Increasing Expenses
- Suspend or Reduce Savings Goals Temporarily: Consider suspending your savings goals temporarily. Chill, it’s okay! You’re not giving up on your dream home, trip to Tahiti, or your child’s college fund. It’s just a temporary pause to rebalance and regain control over your finances.
- Prioritize Expenses: Foster the habit of budgeting. Make note of your ‘essential’ and ‘nice-to-have’ expenses. During trying times, it would be wise to focus more on needs rather than wants.
- Seek Professional Advice: Don’t shoulder this burden alone. A financial advisor can provide valuable insights and personalized strategies suited to your income, lifestyle, and goals.
The finance world in Canada witnessed significant developments in 2023, impacting both the economy and individual finances. By reflecting on what happened with your finances in the past year and implementing better planning strategies for 2024, you can navigate the ever-changing financial landscape more effectively. Remember to set clear goals, create a realistic budget, and diversify your investments to achieve financial success. YNCU is here to help! Click here to book an appointment with one of our advisors, who can assist you with finding the right YNCU product for you to achieve your 2024 finance goals.
For all your general financial inquiries and how you can plan out your financial goals, talk with someone at your YNCU branch!
by Divora Mehari | Sep 25, 2023 | Financial Literacy
Understanding the Financial Literacy Gap with Indigenous Communities
Monday September 25, 2023
Financial literacy (understanding concepts such as budgeting, saving, investing, and understanding credit) is an essential skill that empowers individuals to make informed and responsible financial decisions. Unfortunately, not every Canadian has equal access to financial literacy resources and support, particularly among minority and BIPOC (Black, Indigenous, and People of Color) communities. This gap in knowledge can have long-term implications on their financial well-being and overall quality of life. Let’s discuss the financial literacy gap and its impact on these communities, as well as ways to address this issue.
Minority and BIPOC communities in Canada often face unique challenges when it comes to financial literacy. For many individuals in these groups, access to quality financial education is hard to come by, which hinders their ability to navigate financial systems effectively, limiting their opportunities for economic advancement and financial well-being. Moreover, cultural and language barriers can further contribute to the disparity in financial literacy levels.
To bridge this gap, it is crucial to develop tailored financial literacy programs that cater to the specific needs and challenges faced by minority and BIPOC communities. These programs should be culturally sensitive and designed with input from community members themselves. By providing accessible resources and educational initiatives, we can empower individuals within these communities to build a solid foundation of financial knowledge.
Lack of Financial Literacy for Indigenous Communities Throughout Canada
There is an estimated rate of 15% of individuals without bank accounts in First Nations communities, which was derived from 4.2% of low net-worth Aboriginal respondents to the 2009 Canadian Financial Capability Survey. This percentage was double that of non-Indigenous respondents (Prosper, Canada, 2015).
Historically, systemic inequalities, marginalization, and limited access to resources have hindered the economic advancement of Indigenous communities. As a result, many individuals lack the necessary financial skills and knowledge to manage their finances effectively.
Indigenous people have barriers, unique to them, that impede financial wellness which is influenced by: societal and institutional structures, policies and practices; personal financial literacy and behaviour; and cultural beliefs and values. Historically, trading, bartering, and communal distributions of wealth were central to the allocation of food, shelter, clothing, and tools. These systems were disrupted by colonization and assimilation policies and practices, including Canada’s residential school system. Depending on their geographic location, some communities may also have limited or no local access at all to safe and affordable financial services.
How We Can Make Financial Literacy More Accessible?
To bridge this gap and ensure that financial literacy becomes more accessible to all Canadians, we need to take proactive measures. By promoting education and awareness, we can empower individuals to make sound financial choices. Tailored financial literacy programs ensure that individuals from these communities receive relevant and culturally sensitive education, giving them the confidence to make informed and responsible financial decisions.
One approach is to integrate financial literacy into school curriculums from an early age. By teaching children the importance of money management, budgeting, and saving, we can equip them with essential skills for their future. Providing financial literacy workshops and resources in schools and community centers can also contribute to raising awareness.
Additionally, utilizing digital platforms and technology can play a crucial role in making financial literacy more accessible. Creating user-friendly apps and online tools that simplify complex financial concepts can help individuals better understand and manage their finances. Offering online courses or webinars can also enable people to learn at their own pace, regardless of their geographical location.
Collaboration with Indigenous communities, financial institutions and other organizations is vital in developing targeted financial literacy. These initiatives should incorporate traditional teachings and values while equipping individuals with the tools they need to succeed in modern financial systems.
Understanding retirement planning is also critical to individuals’ financial wellness later in their lives, particularly if they only have limited financial resources. The financial and legal implications of living on- or off-reserve can be very complicated for First Nations peoples, while many people in general are challenged by the increasing complexity of financial products and services, as well as pension and retirement-related government tax and benefit programs. Financial education can help individuals understand how government benefits, employer-sponsored pensions, employment income, investments, and personal savings all fit into one’s overall retirement income.
Building community capacity to deliver tailored financial information, education, and one-on-one support systems is critical to promoting financial wellness within Indigenous communities. This is the only way to ensure that key aspects of cultures and worldviews (such as non-monetary economies, values, customs, and languages) are incorporated to make financial literacy relevant and engaging for these diverse communities. Indigenous Elders and role models can also help to support efforts to enhance community financial information and decision-making, including for Indigenous youth. Developing contextualized curricula that place Indigenous experiences, cultures and values at the core of financial education is essential to any effort aimed at addressing financial wellness barriers faced by these communities.
We encourage you to share some of these financial literacy tools and resources currently available to support financial literacy education for First Nations, Inuit, and Métis peoples:
- AFOA Canada’s Aboriginal Financial Literacy Needs Assessment and Framework – a comprehensive in-depth overview of Aboriginal financial literacy needs and a guide for addressing these. Visit https://afoa.ca/education/financial-wellness/
- The British Columbia Association of Aboriginal Friendship Centres’ Aboriginal Financial Literacy: Journey to Empowerment is a 250-page facilitator’s guide and curriculum exploring financial literacy topics through an Aboriginal lens. Visit https://bcaafc.com/
- The Healthy Aboriginal Network’s Game Plan – comic book for Aboriginal youth featuring a teenager named Jake who struggled with financial wellbeing until he was taught a lesson or two in financial literacy. Visit https://istorystudio.com/wp-content/uploads/2014/04/Game-Plan.pdf
By addressing the financial literacy gap and making financial education more understandable, engaging, and accessible, we can empower individuals and contribute to a financially literate society. Let’s strive towards equipping all Canadians with the knowledge and tools they need to make informed financial decisions, ensuring a brighter and more secure future for everyone. We can help break the cycle of economic disadvantage and promote financial well-being by empowering minority and BIPOC communities through access to quality financial literacy that relates to their individual situations.
Additional financial literacy tools, resources, and events can be found on the Canadian Financial Literacy Database.
Our goal is to ensure every one of our members is equipped with the knowledge and confidence to make responsible financial decisions. Our financial advisors at YNCU are always available to provide educational advice and are happy to assist wherever they can. For all your general financial inquiries and how you can plan out your financial goals, come in and talk with an advisor at your nearest YNCU branch.
by Hannah Johnson | Aug 31, 2023 | Financial Literacy
Bank of Canada Rate Hikes Explained
How Will Rising Rates Impact Your Finances?
Thursday, August 31, 2023
In July of this year, The Bank of Canada increased its target for the overnight rate to 5%, with the Bank Rate at 5¼% and the deposit rate at 5%. This comes only weeks after its early June decision to raise it to 4.75%. Today, we’ll be talking about this recent rate hike and how it might affect your finances. So, let’s dive right in!
The Bank of Canada often raises interest rates to manage the economy and maintain stability. These rate hikes are implemented when the central bank believes that the economy is growing at a fast pace, which could lead to inflation. By raising interest rates, they aim to slow down borrowing and spending, encouraging individuals and businesses to save and invest instead. This helps to prevent prices from rising too quickly and ensures the economy stays on track. This makes borrowing more expensive, reducing consumer spending and cooling down the economy. Through this measure, the central bank can effectively manage inflationary pressures and ensure long-term economic growth. Remember, the Bank of Canada’s actions are always in the best interest of maintaining a healthy and stable economy for all Canadians.
If you have a variable-rate mortgage or any other debt tied to the prime rate, you can expect to see an increase in your payments. Since borrowing costs rise, your lender will adjust your rate accordingly. On the bright side, savers may rejoice! Higher interest rates mean that you’ll earn more on your savings accounts and fixed-term investments. This could be a great opportunity to grow your nest egg or achieve your financial goals faster.
Here are some ways to maintain financial stability despite the impact of rising policy interest rates and inflation on your finances:
- If you find that the price of food and gas has increased in the last year, it could be a good time to re-evaluate your priorities and update your budget.
- If you’re planning to buy your first home, you might have to rethink your budget for the first few years because rising mortgage rates may change how much you can borrow. Click HERE to see the mortgage options YNCU offers.
- If your mortgage rate expires in less than 6 months, an early renewal may be advantageous to secure a lower rate before the next increase, should the rates increase more, without penalty. For a loan coming with a longer term, you will need to take into consideration the penalty fees.
- If you have a variable-rate mortgage, your monthly mortgage payments may increase. Fixed-rate loans will only be affected at the time of your renewal.
- If you have savings at your disposal, this could be an opportunity. When stocks are down, it’s a good time to buy. In addition, some investments, such as guaranteed investment certificates (GICs), see their interest rates rise during a period of rising rates. GICs offer a guaranteed rate of return, so are a safe investment choice, even when the market feels unpredictable. Click HERE to check out YNCU’s current lending and investing rates.
- If you’re concerned about your investments, discuss them with your financial advisor. Above all, don’t make hasty financial decisions. In a long-term strategy, it’s normal for the value of certain investments to fluctuate. Remember that just because rates are rising, or markets are volatile for a period, doesn’t mean your long-term financial plan has to change.
- If you have debts, such as a line of credit, a personal loan, or a credit card balance to repay, prioritize paying off the ones with the highest interest rates first.
- If you want to increase your cash flow or build an emergency fund, you may want to postpone certain projects, like a big trip or renovations.
Of course, it’s always wise to review your personal financial situation with a professional advisor who can provide tailored advice based on your specific needs. They can help you determine whether any adjustments need to be made to your budget or investments. While rate hikes might bring some challenges, they also offer opportunities. By staying informed and taking proactive steps towards managing your finances, you can navigate these changes with confidence.
For all your general financial inquiries and how you can plan out your financial goals, come and talk with an advisor at your YNCU branch!
Don’t forget to follow us on Facebook, Instagram, Twitter or LinkedIn for more honest money talk tips!
by Hannah Johnson | May 25, 2023 | Financial Literacy
STARTING A SMALL BUSINESS
The Dos and Don’ts
Thursday, May 25, 2023
Being your own boss has crossed the minds of many, but entrepreneurship isn’t for everyone. Alongside the ability to work around your own schedule, be your own boss, spearhead the process of turning this passion of yours into a steady stream of income, and all the other benefits to working for yourself, it’s not always an easy road to travel. Starting your own business requires a lot of preparation, caution, courage, and patience. You must recognize that the success of your business depends on you, and this may come with small failures along your journey, but it can also become the best decision you ever made.
YNCU is dedicated to supporting small businesses in our communities and we want to see you succeed in making your lifelong dreams a reality. We’ve put together a few dos and don’ts to help guide you towards starting a small business.
THE DO’S
DO have genuine intentions. Businesses require a strong foundation built on a set of values and principles in order to succeed. If you create your small business with the sole purpose of making money and nothing else, the lack of purpose and direction will quickly become apparent to your clients/customers, employees, and vendors. It goes without saying that a profit has to be made but ensure your honest reasons for building this business extend beyond financial gain.
DO your research. Understanding your competitors is important for any startup. Take some time to look into similar businesses in your market. Try to get insights into how they operate, if they failed and why, who their customers are, their marketing practices, what area they’re servicing, etc. The more you know about your competition, the better prepared you are when it comes time to penetrate the market with your million-dollar idea!
DO take risks. Starting a business is a risk in itself, and almost every decision you make in this process will have some kind of risk attached. However, with the research you have gathered about your competitors, industry trends, and your target market, you can make calculated risks. Every successful business has taken risks to get to where they are, so don’t be afraid to do the same.
DO get your finances in order. No matter what, entrepreneurs need a tight financial plan outlining everything from how much you’re investing, what the return on investment might look like, and how exactly you plan to make a profit. Also be comfortable with the fact that you may not be making a profit in the early days. YNCU has experienced advisors that can help ensure your first financial steps are the right ones. Click here to speak to a YNCU business advisor to get started!
DO everything by the book. Proper bookkeeping, paying your taxes, abiding by rules and regulations, understanding policies, contracts, etc. – ensure you’re on top of it all and if you’re ever beginning to fall off, seek help from a professional. Get everything in writing and always remain professional.
DO take time to get to know your clientele. Understanding your target market is essential when starting a new business by establishing a solid customer base that expands over time. Go beyond demographics and market trends. Dig deeper to find out who your customers are, what their needs are, and what their current problems are. What are you offering to meet their needs?
DO make yourself known to platforms who highlight small businesses in your area. Check out your local Chamber of Commerce, connect with groups on social media, and take advantage of networking events happening in your community.
THE DON’Ts
DON’T get a big head. Being kind and humble when you work for yourself is important in building strong, trusting relationships with your customers, suppliers, and staff. These relationships are needed to efficiently run your business, which means having the right attitude can be what makes or breaks your small business.
DON’T take your opinion as fact. Welcome constructive criticism with open arms. Be open to new ideas and advice, especially from those with hands-on experience. That being said, remember what your goals are and what you envision for your small business. Being open-minded doesn’t mean you have to do anything that steers you away from your overall vision.
DON’T underestimate the cost of the startup process. Anything you’re budgeting for, ensure there is extra room. Don’t underestimate your ‘competition’. Understand that brand loyalty exists even with small businesses. Don’t underestimate the amount of time you will be putting into your business to ensure its success.
DON’T ignore the current market. Keep on top of new industry trends, new products, new competition – be aware of everything that’s happening that may affect your business. Staying informed can give you that competitive edge that sets you apart from the rest.
DON’T take it personally. Growing your own business from the bottom up can lead to strong emotional ties to your “baby”. It’s important to remember that every entrepreneur experiences rejection, be it from investors, customers, partners, etc. Learn to keep your emotions (and your pride) separate from your business and don’t beat yourself up over things you can’t control.
Now go ahead and start that business plan! We have additional resources to help you get started or expand an existing small business. To learn about our business banking and service options, click here.
For all your general financial inquiries and how you can plan out your financial goals, come talk with an advisor at your YNCU branch!
Don’t forget to follow us on Facebook, Instagram, Twitter or LinkedIn for more honest money talk tips!
by Hannah Johnson | Dec 23, 2022 | Financial Literacy
HOW TO TAKE CONTROL OF YOUR HOLIDAY SPENDING
Friday, December 23, 2022
For many of us, the holidays quickly become a money-spending spree. Between the family get-togethers and the never-ending holiday activities, we can get a bit carried away (especially financially) and before we know it, we’re overspending and taking on debt. Not the best way to start a new year. Here are some tips on how to keep control of your finances this holiday season so you aren’t starting the new year with a financial disaster on your hands.
Create a Budget
If you haven’t done this already, create a list of all the gifts you NEED to purchase and how much you can afford to spend on each person. Give yourself a bit of wiggle room but make sure to stay within your set budget. Bring your list everywhere you go and check it often to ensure you don’t pass your limit. Don’t forget about all the other expenses that come with the holidays. There’s food, entertainment, holiday decorations, and travel costs to consider, as well.
When you’re making your budget, make sure to cover all these expenses, in addition to your regular monthly expenses. Calculate how much you can afford to spend over the holidays and keep track of your spending to make sure you stay within your limit. By tracking your spending, you can also help yourself financially plan for the next holiday season and set some realistic boundaries for your expenditures. If at the end of the holidays there’s room left in your budget, consider putting it towards your existing savings plan or as a starting point for an emergency fund!
Be strategic with your gift giving
Consider buying the same gift for multiple people on your list, if you think it’s something they would enjoy. This enables you to take advantage of those buy-one-get-one deals, saving you time and money. You could vary gifts by choosing different colours, styles, or features. If you’re crafty, consider making your gifts. Not only does this add a personalized touch, it keeps you away from busy malls where you may be tempted to purchase things you don’t need.
Paying with your credit card is fun, until it’s not
Credit cards can be a useful tool to cover some of your holiday spending, if you’re using it correctly! It’s important to pay attention to your spending so you don’t end up wracking up a ton of high-interest debt. When creating your budget, keep in mind any existing debt you may have. If you plan to use your credit card, how much can you realistically pay off?
A good tip when buying gifts with your credit card is to consider your payment due date. Most Canadian credit cards have an interest-free grace period of about 21 days. If you know when your billing cycle ends, you can spread out your repayments by as much as 6 weeks by buying some items in one billing period and others in the next. But if you don’t think you can pay off your holiday debt before you start accumulating a ton of interest, it’s probably best to keep your credit card at home.
For all your general financial inquiries and how you can plan out your financial goals, come talk with an advisor at your closest YNCU branch!
Don’t forget to follow us on Facebook, Instagram, Twitter or LinkedIn for more honest money talk tips!
by Hannah Johnson | Nov 25, 2022 | Financial Literacy
THINGS TO KNOW BEFORE LIVING ON YOUR OWN
Friday, November 25, 2022
Eager to live on your own? Have plans to move out of your parents’ place? At YNCU we know how exciting it is to get your own place and start your own journey. We also know that school does not always prepare you for the financial responsibility that comes with moving out. We are here to help! Here are some financial tips on how to live on your own:
Budget
Budgeting is very important as it ensures you are able to buy your essentials and still have a little money on the side. Figure out how much money you are making monthly and what your monthly expenses are. From there you can allocate portions of your money to different areas and determine how much wiggle room you have each month. YNCU has helpful tools that will make this easy – like our household budget tracker and student budget tracker. Using these tools can ensure you are not running out of money before your next pay day.
Pay your bills on time
As important as it is to budget for your bills, it is equally as important to ensure you are paying these bills on time. By paying your bills on time with your credit card, you will build up good credit and have an easier time securing a loan in the future. Avoiding paying your bills can have negative consequences on your finances and can even lead to debt or late fees. Set yourself up for success by setting a reminder for yourself to pay your bills promptly every month.
Save each month
As you plan out your budget, make sure you are planning to save some money each month. This will help keep you financially stable. You never know when you may need to have a little extra money so plan to set some aside each month. These savings can go toward your retirement, paying off any debt or anything else that may happen. It is also a smart idea to plan for emergencies. Emergencies can happen at any time (take the pandemic for example) and you never know when unexpected costs will arise. YNCU can help you with planning your emergency savings account. Learn more about the Emergency Savings Plan here!
Monitor your financial transactions
Make sure you are keeping an eye on your financial transactions. Certain accounts may have fees for each transaction and you could be acquiring extra fees without realizing it. Be sure to check the details of your card (credit card limit, transaction fees, etc.) and plan accordingly. Monitoring your transactions can also help prevent fraud as you can report any transactions that were not made by you. Keeping a close eye will help keep your finances safe.
Make a plan before grocery shopping
Planning your meals before you go grocery shopping can help you avoid purchasing unnecessary groceries. Food costs are drastically rising so shopping with a purpose will ensure you are only getting the essentials. Try to avoid food waste by using whatever you have in the fridge before you go shopping. Cooking in bulk and freezing the leftovers is also a good way to save money on groceries and save you time on food prep.
Get advice
Try to learn as much about finances as possible. There are many external resources that can help you. Also make sure you ask for advice when you need it. Just because you are moving out on your own does not mean you can not ask for help. Chances are you are not a financial expert, so connect to people who are. At YNCU we have many experts who are happy to help!
For all your general financial inquiries and how you can plan out your financial goals, come talk with someone at your YNCU branch!
Don’t forget to follow us on Facebook, Instagram, Twitter or LinkedIn for more honest money talk tips!
