SAVING SMART FOR ALL STAGES OF LIFE

by Divora Mehari | Dec 6, 2023 | Saving

SAVING SMART FOR ALL STAGES OF LIFE

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.

BE READY FOR THE UNEXPECTED

by Divora Mehari | Oct 14, 2022 | Saving

BE READY FOR THE UNEXPECTED WITH YNCU’S EMERGENCY SAVINGS ACCOUNT

Friday, October 14, 2022

At YNCU, we understand how unpredictable life can be and we want to help set you up for financial success. Oftentimes, when planning finances, people only think of their savings, retirement, and managing their debt. People often forget to plan for emergencies. Emergencies can happen at any time (take the pandemic for example) and you never know when unexpected costs will arise.

An emergency fund is what we at YNCU refer to as the money you set aside to prepare for unexpected expenses, like urgent vehicle maintenance, job loss, veterinarian visits, and health problems that result in missed work. You will more than likely be met with a situation where you need money fast, or experience a drop in income at some point in your lifetime. These surprises usually don’t give you enough time to adjust your budget.

It is important not to confuse unexpected expenses with occasional expenses such as school supplies, winter tires or holiday expenses. Occasional expenses should already be planned for in your budget.

Make sure you are setting aside a reasonable amount each month for your emergency fund. Although it’s important to save gradually and plan ahead, it’s not helpful to break your budget to do so. By putting aside a little every few weeks, you will have enough to cover those unexpected situations. Also remember to take advantage of every chance that can help you add to your emergency fund. Deposit any additional amount into your savings whenever you can. The general rule of thumb is to save 3-6 months’ salary for your emergency fund, but do what works for you and your budget.

YNCU is now offering an Emergency Savings Account that offers a higher rate than our traditional savings accounts, has no minimum balance requirements, and no monthly fees. We recommend setting up recurring contributions to be auto deposited into your emergency savings every pay period. This product was created because YNCU listened to the needs of our members to help them stay on track for their financial goals even when something unpredictable occurs. This emergency savings account makes it possible to:

• Handle an unexpected expense without going into debt
• Avoid high-cost loans (like payday loans or credit card cash advances)
• Avoid incurring costly credit card interest rates
• Have financial control and peace of mind

Learn more about the Emergency Savings Plan here!

For all your general financial inquiries and how you can plan out your financial goals, come talk with someone at your YNCU branch!

HOW YOU CAN SAVE MONEY DURING THE HOLIDAYS

by Hannah Johnson | Dec 3, 2021 | Saving

HOW YOU CAN SAVE MONEY DURING THE HOLIDAYS

Friday, December 3, 2021

They call it the most wonderful time of the year for a reason! The holidays are for reconnecting with loved ones, celebrating the beauty of the season and gathering to enjoy holiday treats. However, when it comes to gift giving and other holiday-related expenses, the holidays can be a major source of financial stress for some.

Between the purchasing of presents, unexpected costs associated with holiday parties and the multitude of social events, it can seem impossible to save during one of the most expensive times of the year.

While spending money during the holidays should never be necessary, we understand that everyone wants to be able to balance their financial goals with their holiday spending.

Luckily, it is very possible to stay on track during the holidays. You just need to be strict with your budget, realistic with your holiday expenses and willing to plan ahead for those unexpected costs that tend to creep up.

Here are our top tips on how you can still save money during the holidays:

1. Set a strict budget ahead of time

Carefully planning out exactly what you will buy for each person on your shopping list and setting a strict budget for each item is critical to ensuring you don’t overspend.

Shopping without a plan could mean losing track of how much you have spent in a short period of time, not leaving enough money for monthly expenses or dipping into your emergency savings.

Instead of leaving your spending to chance, set your budget well before the holidays and make sure you keep yourself accountable. If you tend to overspend beyond a set budget, try taking out cash and leave your cards at home. This is a simple and effective method to keep your spending in check while removing any possible temptations of spending above your limits.

2. Keep your automatic transfers on

With all of the spending that takes place around the holidays, many people tend to assume they can’t save any extra cash. As a precaution, they may turn off their automatic transfers to their savings accounts to ensure they have enough cash for holiday spending — but this may be an unnecessary precaution.

Make sure you crunch the numbers ahead of time, and if there is room in your budget to keep your automatic transfers on, then do not turn them off. If you know you can’t save at the same rate as other times of the year, then simply lower your automatic transfer to a more manageable amount. You may not save as much for a month or two, but it’s better to tuck some money aside than nothing at all.

Once the holidays are over, we recommend setting a notification on your phone, computer or even making a note on your calendar to increase your automatic transfers back to their regular contribution amount.

3. Use debit over credit

As online shopping for the holidays continues to grow in popularity (thanks Black Friday and Cyber Monday sales!) it’s becoming easier than ever before to charge all of your holiday spending to your credit card. While this can alleviate the movement of cash out of your chequing account for the short-term, this can lead to a shockingly high credit card bill 30 days later.

Last year, one quarter of respondents to an online survey reported they spent more than they intended to over the holidays. 16% of those same respondents also estimated they likely wouldn’t be able to pay off their credit card debt from the holidays for at least two more months.

This is incredibly costly, as the monthly interest and ongoing expenses will continue to increase the debt owed. With time, it will only get harder to pay off and your credit score may drop.

To avoid this, we recommend using your debit card as much as possible. If you must make a purchase with credit, pay it off immediately before additional expenses come up.

4. Remember that it’s okay to say “no”

We understand that FOMO (fear of missing out) around the holidays can be real. We want to be able to see everyone, give a gift wherever we go and pay for that extra bottle of champagne — but we don’t have to do it all.

If it’s all becoming too much, your budget is at its limit and money is flying out of your bank account faster than it’s coming in, it’s time to call it quits.

There is nothing wrong with politely declining extra expenses and letting those in your life know that you’re on a strict budget this year. Everyone will understand and if anything, they may be relieved as they are probably hoping to save a bit more cash this time of year too.

Having open and honest money conversations with those in your life around the holidays is an important step to staying on budget and keeping more money in your savings account.

5. For next year, start shopping as early as possible

Spending is very much attached to psychology. There is something about shopping with the holiday music blasting above you, the glistening lights in the storefronts and the hustle and bustle of the other shoppers that make you more likely to overspend.

To keep a level head, we recommend hitting the stores as early as possible to avoid crowds and the temptation of going overboard.

Starting early can also mean capitalizing on some end of season sales and snagging the must-have items before supply drops and prices start rising.

6. Track your spending this year to help plan for next year

If you want to get a head start on your holiday finances for next year, we recommend tracking all of your spending this year and dividing the total by 11. Whatever your resulting calculation comes to, we recommend setting up a special holiday savings account and automatically transferring that total into your holiday account each month until the end of next year. This is a simple and effective method to ensure you have enough saved by the time the holidays roll around next year.

Despite all of these tips, it’s important to remember the holidays are about so much more than gift-giving. They are a time to reconnect, spend time with those you love and make memories that will last a lifetime.

We encourage everyone to focus on the true reason for the season and look beyond materialistic traditions when it comes to celebrating the holidays. Making a handmade card, baking a special treat or simply sharing your time with others are the best ways to connect and spread joy this season.

For those who want to balance their budgeting goals while giving gifts this season, it is very possible to save your money, so long as you keep a level head and are realistic about what you can or can’t afford.

YNCUniversity is here for all your financial literacy needs. Need one-on-one help? We got you! Reach out to our advisors HERE.

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