Are you doing financial planning for the first time? Guide for single income women

Although some financial advisors recommend the 50-30-20 rule, where 50% of your paycheck goes to fixed expenses, 30% to discretionary expenses, and 20% to savings, it’s a good idea to set aside only 10% of your take-home pay for savings. There is no harm. more. “We can be as efficient as possible with that 10%… meaning we can put your savings into a diversified portfolio where the expected returns will be higher and over a longer period of time.”

Ayana Forward, financial advisor and founder Retirement in View In Ottawa, she acknowledges how difficult it can be for single women and all women to create an investment plan, especially early in their careers. “You have all kinds of competing priorities,” including possible ones, he says child care expensesmortgage, car payments and school loans. But Forward encourages women to start saving everything they can as soon as possible to build habits and benefit from compound interest; This is when the interest on your money starts earning its own interest.

This is what it might look like: Let’s say you take $100 a week from your diversified share, invest it at a 5% interest rate, and watch it grow. After 30 years, if you had put that $100 into a no-interest or low-interest savings account, you would have only $156,100; but since you invested, you would have $345,914. (Calculate your savings with our tool compound interest calculation.)

Prioritize your loved ones

What are your must-haves in life? Those of you who are non-negotiable? You don’t have to give up on these; You may need to find an alternative way to make them work while meeting your savings goals. “My client, a college instructor, loves to travel, and his trips are often tax deductible,” says Hughes. But while he continued to save money, he found a part-time job to cover travel expenses. “This gave him extra income as he was determined to achieve his goal of owning his own home,” says Hughes.

Whether you buy one side hustle or not, you’ll still have a few sacrifices to make. Cornelissen says it’s a matter of looking at your budget and deciding what you want to prioritize in the near future and what you can give up for a while.

Or it may save you from doing the opposite, oversaving for fear of not having enough money. Knowing how much money is coming in and out of your account is key to making a plan for your money.

Reconsider your employee contract

If you work full-time, find out whether your company offers a pension or an employer-sponsored plan such as RRSP matching (where an employer contributes the same amount as an employee). registered retirement savings plan). This will help you determine how much you need to save for retirement. “If you you don’t have a pensionYou will need to save more than someone with a pension,” says Forward.

Also research government revenue sources that may be available when planning for your retirement. Canada Pension Plan (CPP) And Old Age Security (OAS). “You can log into your My Service Canada account to receive these benefit notifications, so you know what you’re getting from these programs,” says Forward. (You can log in My service My Canadian account Sign in using a unique password or with your bank account.)