6 steps to your financial wellness 

Usually when people think about well-being, it’s connected to physical, emotional and mental health. All those components are important, but there’s another aspect that also deserves your attention— financial well-being.

With so many priorities competing for your attention, finding time to focus on your financial well-being can be a challenge—but it’s an important goal. Understanding your relationship to money and having your finances in order can help you feel more confident about the future and your ability to handle life’s unexpected challenges.

So, where do you start? Consider this your guide. Here, you’ll read about everything from setting a budget to investing.

Financial well-being is about gaining a clear understanding of your personal finances and developing a plan to manage them that allows you to be secure in your present and build towards security in your future.

Everyone has different ways of approaching conversations about money. You can take the What’s your Money Style quiz to uncover different aspects of your unique perspective on money. 

Just like with other areas of your life, you need to look after your finances to keep them in good shape—but it doesn't have to make you sweat. It starts with having a better understanding on how to manage your money effectively and discovering the tools available to help reach your financial goals. Here are some steps towards financial well-being you can start on today.

When you create a budget, you get a better understanding of where your money is going and how you can tweak how you are spending and saving to meet your goals.

One way to do this is to use a spreadsheet to make a budget. In one column, list the income you receive from all sources. For example, you might have employment income, rental or investment income, support payments, a pension, or other sources. Next, list all of your expenses. It’s helpful to divide them into two categories: non-discretionary and discretionary. Another way of saying this is needs and wants. Things like rent, groceries and transportation would go in the non-discretionary (or needs) section, while entertainment, new clothes and ordering in the occasional dinner would be wants.

Seeing your finances laid out clearly helps you better make decisions about where to spend and identify areas where you may be overspending. You can then start moving those funds towards more important savings goals. If you’re carrying debt, building and sticking to a budget will help you make a plan to pay it down.

Want to skip the spreadsheet? Scotia Smart Money by Advice+ can help you with managing your budget.* It makes it easy to track your bills, monitor spending and manage your cash flow from the convenience of the Scotiabank app. Plus, you'll get personally tailored advice you can use to better manage your money.

The Scotiabank Money Finder calculator can also help you determine if you have additional funds available to put towards your financial goals by comparing your income to your expenses.

Whether it’s an old student loan or keeping on top of your latest credit card bill, carrying debt can be stressful. It’s important to prioritize debt management to improve your financial wellbeing.

There’s no one right way to tackle debt. Check out these three strategies to see if one or more is right for you.

• The debt snowball method:
  With the snowball method, you start by paying off your smallest debt first, while making the minimum monthly payments on all your other debts. If frequent small wins motivate you more than a longer-haul big win, the debt snowball method could be a good choice for you. On the downside, you won't always be tackling your highest-interest debt with this method, which means you'll likely take longer to pay off all your debt. 
  
  
• The debt avalanche method:
  The debt avalanche method has you paying off your highest interest debt first, while also making the minimum payments on all your other outstanding balances. With the debt avalanche method, you end up paying less interest overall than you would using the snowball method since you're paying off your highest-interest debts first. It’s a great option if you are willing to commit to it since it takes longer to see your first “win” of retiring a debt.
  
  
• The debt consolidation method:
  With the debt consolidation method, you use a consolidation loan to pay off your other debts, combining all your debt payments into a single monthly payment. You might want to consider this option if you have a lot of high-interest debt. The optimal consolidation loan is one that offers you a lower rate of interest overall when compared to the debts you'll be paying off with the loan.

If you want to learn more about options to pay off your debt, read this article or meet with a Scotiabank advisor.

Time is your biggest ally when it comes to saving, so don’t put off putting money away. Even if you can only set aside a small amount each month, it’s worth it. It will earn compound interest, which is the interest calculated on your principal (what you deposit) plus the interest it accumulates.

Just how you save will depend on your income, spending habits, and financial goals. Start by asking yourself these three key questions:

• What are you saving or investing for?
• What is your time horizon to reach your goal?
• What is your risk tolerance?

When it comes to saving, it’s easy to get sidetracked. If that sounds like you, consider a Pre-Authorized Contribution (PAC), which lets you automate your contributions. Just choose the amount you’d like to contribute and how often and then PAC does the rest. Learn more about how a PAC could help you reach your goals.  

Think of a financial plan as your roadmap to financial wellness. When you build a plan, whether alone or with an advisor, consider where you are, where you want to be, and how you will get there.

A strong financial plan focuses on your current needs and future goals and puts strategies in place to help you achieve them. Once you have a plan in place, it’s important to revisit it regularly to confirm that you are still on track to meet your goals, or if adjustments should be made.

A comprehensive financial plan will address your estate-planning needs, which includes tasks like preparing a will, establishing a Power of Attorney and implementing tax-planning strategies to help you pass assets onto the next generation.

Our Scotiabank advisors, along with financial planning tools and products, can help you create a financial plan that’s right for you. According to a recent Scotiabank national poll, 3 in 4 Canadians who work with an advisor feel their financial advisor offers them comprehensive planning and advice, with 85% confident in the advice they receive from their advisor, and 78% indicating that with the advice from their advisor, they are better off financially than if they managed their money on their own.**

We work hard to build a happy, safe and fulfilling life for ourselves and our families. Sometimes along the way we encounter unexpected events that could seriously affect our ability to maintain our standard of living and provide for our loved ones.

A financial plan that includes insurance can help keep your financial goals on track and provide your family with financial security, in the event of challenges like a job loss, disability, illness, or even loss of life.

Some questions to consider:

What if…

• you had to stop working because of a sudden disability or critical illness? Could you continue to meet your mortgage and line of credit payments?
• you unexpectedly passed away? Would your family be able to pay your outstanding debts, continue with their current way of life and be financially secure moving forward?

A variety of insurance coverage options may be available through your employer, private insurance, government benefits or your financial institution. The key is to learn about the coverage that is available and to determine what is best for your financial situation and will provide you and your family with the protection they need.

To learn about the creditor insurance protection coverage options available through Scotiabank to insure your Scotiabank borrowing products such as your mortgage or line of credit, speak with a Scotiabank advisor or visit scotiabank.com/insurance.

It’s time to put this financial knowledge to use and form some healthy habits you can commit to. This means revising and sticking to a budget, reviewing your goals and tracking your progress to ensure you have a solid savings plan.

One way to keep on top of your financial wellness is to block out time in your calendar to reviewing your finances. Take time to:

• Review your bank statements
• Pay all bills
• Cross-reference your spending with your budget
• Make contributions to any savings accounts
• Check in with any debt you carry and make sure you’re on track to pay it down
• Check your credit score

None of these tasks take long, and they can be done once per month.