Canadians agree that saving for what matters is easier with a personalized plan for success
- @TDNews_Canada poll finds 76% of Canadians agree being financially fit is a priority #financialfitness: http://bit.ly/1xKEVNK (Tweet this)
- Key to financial fitness is building a realistic plan and sticking to it, says @LindaMacKay_TD. #FinancialFitness http://bit.ly/1xKEVNK (Tweet this)
- Break down long term savings goals into manageable chunks to stay motivated, says @LindaMacKay_TD #FinancialFitness: http://bit.ly/1xKEVNK (Tweet this)
TORONTO, Jan. 6, 2015 /CNW/ - Although Canadians have different ideas about what it means to be financially fit and how to get there, almost everyone agrees that being in good shape financially is a goal worth striving for. And while the idea of saving for the future while managing existing debt and juggling day-to-day financial obligations can feel overwhelming, the key to success is finding a strategy that works for each individual. As a recent TD survey found, most people agree they would find it easier to become financially fit if they had a clear plan to help them get started.
"Making the decision to become financially fit is a lot like setting physical fitness goals – everyone's individual circumstances and their financial goals are unique," said Linda MacKay, senior vice president, retail savings and investing, TD Canada Trust. "But whatever the goal, the first step is building a realistic plan to get there, followed by committing to stick with it, reviewing progress on a regular basis and making little tweaks along the way."
According to TD's research, the most common definition of financial fitness is not having any debt, followed closely by not having to worry about finances on a day-to-day basis. Being on track with retirement, education or other savings is third, along with being able to afford the lifestyle people want and having an emergency fund equivalent to three-month's of salary.
"Financial goals should be broken down into short, medium and long-term. Long-term goals might include saving for retirement through regular contributions to an RSP. Medium-term could include saving for a down payment on a home, putting money into a Tax Free Savings Account or into an RESP for a child's education. And short-term may be ensuring you have day to day savings like an emergency fun to help with the unexpected." MacKay said. "No matter what you want to achieve or where you're starting from, even a small step is a step in the right direction."
Michelle Crispe, Personal Trainer and Health and Wellness Expert, says it's the same for people who want to become physically fit.
"When someone comes for advice, the most important thing is for me to understand their specific goal, whether it's weight loss, to get stronger, improve their cardio or rehab an injury," Crispe said. "Next, we benchmark their starting point and take stock of their habits. Finally, we develop a realistic, holistic, plan to help them reach their goal within their preferred timeline."
Goal setters need to be realistic, not expect a drastic change overnight, and not get discouraged because of the disparity between where they are and where they want to be, according to Crispe. Goals like physical fitness should be a gradual process, but Crispe says a great way to stay on track and motivated is to set a series of short-term goals and reward yourself when they are reached.
Breaking down a long-term goal into smaller pieces that are easier to manage also works for financial fitness, says Mackay.
"Long-term goals, like saving for a down payment or planning for retirement, can seem daunting, but the way to get there is to start as soon as possible, develop a plan and follow a financial routine using all the tools available to you," MacKay said. "For example, a financial advisor can help identify milestone targets within each goal, like saving a specific amount of money over a certain amount of time or increasing the percentage of income put into an RSP every month."
MacKay has some other tips to help people become financially fit:
- Talk to a financial expert – Think of a financial advisor as a personal trainer who can help identify financial goals, assess the current situation and develop a realistic plan to achieve them. An advisor can help work through questions like how to prioritize investing for retirement and paying down debt, and navigate the savings vehicles that make the most sense based on each individual financial situation.
- Pay yourself first – One of the easiest ways to build savings is to set up an automatic transfer of a set amount each month into a savings account. Whether it's 20 dollars a day, a week or every pay, setting aside money on a regular basis adds up in the long term, particularly when those savings earn compound interest. Also, commit to saving some, or all, of any extra money that comes in through avenues like bonuses or tax refunds.
- Set up a budget – Apart from helping understand how much money is coming in and going out, a budget can help identify opportunities to increase savings to help achieve financial goals. A budget, like a physical training regime, can have both short-term and long-term goals, which should be adjusted as personal circumstances evolve.
About the TD Financially Fit for Future Survey
TD commissioned Leger to conduct an online survey of 1,912 Canadians between November 3 and November 9, 2014 using Leger's online panel, LegerWeb. A probability sample of the same size would yield a margin of error of +/-2.2%, 19 times out of 20.
About TD Canada Trust
TD Canada Trust offers personal and business banking to more than 11.5 million customers. We provide a wide range of products and services from chequing and savings accounts, to credit cards, mortgages and business banking, to credit protection and travel medical insurance, as well as advice on managing everyday finances. TD Canada Trust makes banking comfortable with award-winning service and convenience through 24/7 mobile, internet, telephone and ATM banking, as well as in over 1,100 branches, with convenient hours to serve customers better. For more information, please visit: www.tdcanadatrust.com. TD Canada Trust is the Canadian retail bank of TD Bank Group, the sixth largest bank in North America.
SOURCE TD Canada Trust
Image with caption: "Path to Financial Fitness is as Unique as the Person Who Wants to Get There (CNW Group/TD Canada Trust)". Image available at: http://photos.newswire.ca/images/download/20150106_C6660_PHOTO_EN_9946.jpg