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Financial Literacy Month: How To Talk About Money, Getting Out of Debt, and Saving for the Future

November is Financial Literacy Month in Canada, an opportunity to check in on personal finances, get comfortable talking about money, and review our habits so that we can feel empowered with how we save and spend, versus feeling disorganized and stressed out.

To gain insight from an expert, we asked Ahmad Dajani, VP, Retail Deposits and Investments at Scotiabank, to share his best advice on how Canadians can manage debt, what small changes we can make in our everyday routine to grow our bank account, how to get better at talking about money (often the most difficult thing in a relationship), and the steps you can take now that will transform your financial situation within six months.

1. What was the best piece of financial advice you ever received?

Very early on I was lucky to receive great advice on what I know today are key principles that help Canadians to be better off.  These principles include paying yourself first, starting to save early, and saving regularly. This advice has been integral in my approach to saving.

2. What’s your best piece of financial advice for Canadians living with debt?

If you are feeling overwhelmed by debt, please seek the assistance of a financial advisor. Working with you, a financial advisor can help you create a financial plan customized to your unique situation, and provide you with strategies to get you out of debt sooner. Our Advisors are available at no cost and no minimum portfolio is needed to create a financial plan.

Of course not all debt is bad debt. Debt that is within your means to manage, used to purchase an asset, such as a principal residence, that holds or increases in value over time may be perfectly appropriate. However, if it’s high interest rate debt that you are dealing with, then paying it down quickly should be a priority.

3. In your opinion, what is the smartest small change to make in our daily lives to save money?

Paying yourself first using pre-authorized contributions will help make saving a habit. Align your pre-authorized contributions with your pay cycle – you won’t miss the money and the savings will add up quick. Also, consider products and services that help you save while you spend. For example, Scotiabank’s Bank the Rest program allows you to round up every debit purchase to the next $1 or $5. You pocket the difference in your savings account and overtime you’ll see the dollars and cents really add up.

4. Many people are intimidated by money talk; how does one become financially literate? 

People take many different paths to becoming financially literate. Many use a trusted family member or friend who is an expert in the field to start the conversation. Some are avid readers of the news and of course many turn to information available online. Money talk shouldn’t be intimidating. Beginning the conversation with friends or family is important and a great place to start, but meeting with a financial advisor is especially helpful to deepening your knowledge and building strategies to help you become better off.

5. Three tips to see a positive change in one’s bank account in six month’s time:

My top tips are:

  • Create a budget – start tracking your monthly spending to spot opportunities to save more toward your goals. Using our online Money Finder Calculator is a great way to help you with this.
  • Create and maintain a Financial Plan (and start as early as you can) – this is the best way to establish goals and know how you’re progressing toward achieving them.
  • Set up Pre-authorized Contributions (PAC) – this is an excellent and easy way to make sure you’re consistently contributing to your savings automatically! And don’t forget to regularly revisit how much you contribute.

6. What routines do you have to keep to be on top of your finances?

A few of my go-to routines include:

  • Live within a budget – it may sound simple, but spend less than you earn. Using a budget and understanding where your money is going, will empower you to make financial decisions to help you achieve your goals
  • Create good financial habits – Pay Yourself First by setting up automatic contributions that coincide with your regular pay cheque. It’s an easy way to ensure savings grow over time!
  • Digital Diligence – I use my mobile banking apps, and services such as Scotiabank’s InfoAlerts to monitor my spending

7. Anything else you’d like to share with the average Canadian trying to live comfortably?

It’s surprising how many Canadians don’t have a financial plan. It’s free to create at your local Scotiabank branch and will be helpful in keeping you on track to achieving your goals.

It’s also important that you check in annually on your plan. Priorities can change year over year and it’s important your financial plan fits your ever-changing life. An annual review of your finances will help you to feel more confident about your financial situation.

This post was generously sponsored by Scotiabank, but the thoughts and opinions are my own. 

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