It’s nowhere near anything anyone would call “a new year.”
It’s not even close to what people would really call a new season, unless you’re in Ottawa and got a freaking snowstorm on Monday morning, and you’re hopeful that it was finally the last we’ll see of winter.
Sidebar: man I hope that’s the last we see of winter.
So it makes sense that it’s kind of the “low season” when it comes to things like goal setting, and tackling new projects, and just generally starting stuff.
Other than drinking on patios, that is, because I am all set for that to start anytime now.
But it turns out, it was only a few weeks ago this time last year that I finally took the plunge took the entirely-too-easy first step towards getting my money life in order. I know, because every once in a while, I check my Tangerine account notifications, and one popped up for me congratulating me on my anniversary.
In honour of my one-year Tangerine-a-versary, I wanted to take a look at the other steps I took this year that felt like Really Big Financial Things, but in all honesty, took me less than an hour to do – in most cases, much less than an hour.
If you’re in the mood to take steps too, and you’re ready for a push, consider this it.
If you haven’t done everything on this list – what are you waiting for? Pick one, set a timer and just do it. I wish I had done this all years ago, or at the very least know how easy it would be to do once I finally just sat down and got it done.
Be a rebel. Make an April 13th resolution.
Because everyone does New Year’s resolutions.
Sign Up for a No-Fee Chequing Account
I’ve written before about how happy I was to switch to Tangerine, which is unsurprising given that one time, I paid $50 a month in bank fees out of nothing more than sheer ignorance about how much I was being charged per debit transaction.
You know what’s nice? Not worrying that I’ll be paying $1 every time I want to rely on debit instead of credit to pay for things.
That said, this seemed like such an easy thing to do in theory, but it took me forever to do it. I knew – like, deep in my bones knew – I would be cool with online banking, and that it suited me perfectly, but it took me years to finally do it.
Don’t be like me. Don’t spend years paying bank fees. Sign up for a Tangerine account.
Fun fact: Tangerine keeps track of the interest you earn and the bank fees you would have been paying over the time you bank with them. I’ve saved $133.06 in bank fees over the past year. That’s like, ¼ of what it costs me to have The Dog every month, so I think what I’m really saying is that online banking will buy you a week of dog ownership.
Separate Your Savings Accounts
Once upon a time, I used one single savings account for everything other than retirement.
Saving up for vacation? That went into the account.
Emergency fund savings? Add it to the account.
Vet bill savings? Yup, throw it in there.
In my head, this really was my “emergency fund” savings, but trust me when I tell you I thought nothing of withdrawing four-figure amounts to cover vacation expenses when they came up.
In news that will surprise no one, that account never really accumulated a significant balance. It hovered right around the $2,000 mark for as long as I had it, and anytime it went above that something always just seemed to happen.
Funny how that works.
Thanks to my newfound decision to take control of the bank fees I was paying by switching to Tangerine, I already had momentum to look at my banking set up, and decided that wow, this “only using one savings account” thing wasn’t really working out for me.
So I set up five savings accounts instead, and gave them all names.
If I wanted to buy new stuff for the house, that got its own savings account (mama wants a king sized bed someday.)
If I wanted to go on vacation and have a slush fund for gifts, that got its own savings account.
Same goes for a house downpayment, an emergency fund for the dog, and an emergency fund for me.
All of a sudden, my emergency fund – my real, separate emergency fund – has way more than $2,000 in it.
The simple change of adding a few extra savings accounts with the click of a button has probably been one of the highest-impacts things I’ve done for my finances over the past year.
So just do it. Go log into whatever online banking system you use. Add a savings account to set aside money for a specific goal, and for bonus points, set up an automatic contribution to be added to it every month.
Calculate A Savings Goal
Once you’ve got separate accounts for the things you’re saving for, it might help to figure out how much you’re planning to save up in some of the accounts.
Not even so that you know how much you “should” have in them, although that’s important.
More importantly – at least the way I look at it – is that if you have a set goal, you know when you can stop saving.
I’m not saying I don’t like saving or anything, but hear me out.
A great example is my emergency fund. I calculated a goal to save up $8,800 based on how much I spend each month and how long I estimate I’ll need it for. As soon as I hit that number, the money I’m contributing to that goal can be sent towards other things, like my house downpayment fund!
Reaching a savings goal is nice, but having that extra money to throw towards other goals?
Priceless.
Go figure out how much you need to save for just a single one of your savings goals – here’s how I calculated my emergency fund savings goal and my pet emergency fund savings goal, if you’re looking for somewhere to start! Bonus points if you can set up your savings account to keep track of that goal for you (I hear both Tangerine and EQ Bank let you add a goal to your savings accounts, but maybe that’s just an everywhere feature these days?)
Track Your Spending
There’s not a lot more I can say about tracking your spending that I haven’t already said (if you want the recaps, try this post or this one or this one) but it will seriously change how you see your money – and how you feel about it too.
If you’re not convinced, try it for a week. Make a note somewhere – even on the back of a napkin if you have to – of what you spent money on that week, and how much you spent. I guarantee it won’t take that much time, and I also guarantee you’ll learn a lot about your spending habits.
You can even do this by pulling up your bank account and credit card statements and looking back at a week of spending you had recently, if you want to get it out of the way all at once. The data is right there waiting for you!
Start to Invest
As I said in the Globe and Mail, investing was always something I knew I should do, but I never really knew where to start.
I tried once, and I went to my bank and asked about mutual funds. When I did that, my “advisor” told me I didn’t have enough money to invest – even though I probably had about $4,000 sitting my in RRSP.
Pro: I didn’t get locked in to high MER bank mutual funds.
Con: This was in 2012 and I missed out on some pretty great years of market growth.
After that total non-adventure, I didn’t really do much about the whole investing thing. I knew a little bit about it, or at least enough to know…
- High management fees are usually something you want to avoid
- Trying to beat the market is for people who spend a LOT more time thinking about investing than I do, and
- I need something low maintenance, along the lines of a Couch Potato portfolio that tracks the market
The key word here is low maintenance, especially since the “getting started” bit was the one that really kept tripping me up. I knew just enough about the whole thing to know what I wanted, but not enough to know how to get there.
Until I discovered robo-advisors.
It was this moment of realization, like “Wait, you mean someone has built exactly the service that I wished someone would offer me, and I can sign up entirely online?!”
So I did. Literally that day, I opened up an account with Wealthsimple, and I haven’t looked back – even though I did invest right before a big market correction, I’m still happy I did it.
Setting up and funding your Wealthsimple account will take you no more than 15 minutes, and Half Banked readers who sign up through this link will score their first $10,000 managed for free, for a whole year.
In retrospect, these are really the most impactful financial moves I’ve made in the past year, bar none.
It’s a little sad to think back and realize that every single one of them took me less than an hour to do, especially when I consider how freaking long it took me to do them.
But, in true learn-from-my-mistakes fashion, I don’t want it to take you guys as long as it took me.
If you haven’t done these things, what are you waiting for? It’s April 13th. It’s a day for fresh starts (apparently.)
I’d love to hear from you guys – are you planning to take one (or many) of these steps? Is there anything you’d add to the list of “awesome finance moves you can make in under an hour”? Chime in!
I do all of these minus the robo-investor part of the last one. What wonderful reminders that relatively simple changes can make such significant differences in our finances. It took me about an hour to shop around insurance, and that paid off nicely (minus the stupid follow-up phone calls that I’m still ignoring). It also took me about an hour to juggle our budget numbers to figure out how we could trim from certain areas to pad our mortgage payments (doubling them each month currently).
Those are AWESOME additions Penny, and so true about the insurance follow up calls, lol. I am doing the exact same thing right now! Reviewing budgets is another amazing one, and is actually what prompted this entire blog, so I can’t believe I forgot to include it, haha. Whoops? #ProBlogger
I’m further along the trail than you right now, so I’ve already got these covered. Early on, though, I’d have been grateful for such a list as you’ve got here.
Thank you! I figure in another year I’ll have version 2.0 of this list as I take the next round of steps!
Hey Des! I love this list and agree that they are such simple moves that make a huge difference. I haven’t created the separate bank accounts yet or truly calculated my savings goals (just an idealized projection or 2), but the others were absolutely so helpful when paying off my debt.
2 other things I would add:
1) Signing up for CRA my account – so helpful to see when my rebates are expected to deposit and what my tax history is
2) Signing in to the NSLSC and just looking at the numbers! My motivation changed very quickly once I saw that I had a daily interest charge of over $5 and that my $260 minimum payment was actually $150 of interest. The main motivation for me was watching that daily interest charge decrease to the point where it felt like I was only dropping quarters instead of entire $5 bills….EVERY DAY!
(UGH, why do I keep forgetting that reply =/= comment?? Sorry!)
Hey Des! I love this list and agree that they are such simple moves that make a huge difference. I haven’t created the separate bank accounts yet or truly calculated my savings goals (just an idealized projection or 2), but the others were absolutely so helpful when paying off my debt.
2 other things I would add:
1) Signing up for CRA my account – so helpful to see when my rebates are expected to deposit and what my tax history is
2) Signing in to the NSLSC and just looking at the numbers! My motivation changed very quickly once I saw that I had a daily interest charge of over $5 and that my $260 minimum payment was actually $150 of interest. The main motivation for me was watching that daily interest charge decrease to the point where it felt like I was only dropping quarters instead of entire $5 bills….EVERY DAY!
Hey Mel – thank you! And those are SUCH awesome additions!
Confession time, I STILL haven’t signed up for my CRA account. I keep calling, getting them to mail me whatever I need to do it, and then it mails to my mom’s address and I never get it in time to update it before it expires. I know that if I actually paid attention and made the effort, I could do it, but uuuuuggggggghhhhhh mail. It’s my achilles heel. That’ll be on my list when I do this post, version 2.0 next year!
You can sign up online….
I can’t tell if this is a question, haha, but yes. They have all of the disclosure forms and other legal stuff enabled to handle e-signatures so no paper required! They do reach out to do a quick on boarding call to make sure the risk assessment is accurate for your portfolio.
This is a perfect list. Everyone who hasn’t done this stuff — go do them all today! Like right now. Nowadays, in the era of internet-created transparency, there is simply no reason to pay excessive fees! I was just talking to my bank/investment company (*not* Vanguard, who we do our real investments with), and they were trying to sell me on their mutual funds. My response was basically, “Hahahaahahahahahaahahahahaahaa. You MUST be joking! Why would I EVER be willing to pay fees close to 1% when I have .05% locked in at Vanguard?!?!?!?!” But then again, they were the first people to offer completely free checking (including refunds of ATM fees for any ATM, and later they added the ability to scan checks on their mobile app), so I still love them. 🙂
Awww thank you – it means a lot that you think it’s a good list! And soooo much yes to not paying fees / paying more than you need to for anything, ever. I think my favourite part of managing my money these days is that you can always compare prices, you can always find more information, and you have every opportunity to go into these kinds of decisions (which bank, which investment, etc.) totally prepared. I can’t even imagine the power imbalances that would have been rampant before the internet happened (said the millennial who grew up online :S)
I’m a self-diagnosed money hoarder, so your comment regarding how separate savings accounts allows you to see when you can stop saving is a great reminder for me. I save just to save, and I could most likely be utilizing my money more productively if I determined those end goal numbers.
Also, an important thing I’d like to add to the list: automate your savings. You’ll essentially be ensuring that your money is going to where your priorities lie (and not to a pair of $200 shoes you bought on a whim).
Hahahaha oh man, ME TOO. Money hoarders, unite! Honestly, if I wasn’t trying to find every single extra dollar I can to hit my (probably too aggressive) house downpayment goal in the next two years, I probably never would have figured out that eventually, if I hit my savings goals, I can free up that money to send towards the house downpayment!
And YES OMG everyone go automate your savings right now. Stop reading, close this tab and go set up automatic transfers. Now. I can’t even believe that didn’t make the list, haha – I guess because I had technically always done that in one way or another, but thank you for adding it! So important.
I am so on board for Wealthsimple. Plus, their commercials make me laugh. A question about Tangerine for you though – do they charge any fees for chequing accounts?
One more thing you can do in under an hour is invest time in brainstorming ways to increase your income! Because more money doesn’t really mean more problems (for most of us). In fact, it means less.
Oh man, they TOTALLY DO NOT CHARGE FOR CHEQUING ACCOUNTS! I am actually yelling at my computer right now because it is the flipping best thing in the whole world. I love Tangerine so much. NOT paying bank fees is my jam – they even pay you interest on your chequing account balance, which is cool if you aren’t like me and sending every spare penny towards your savings goals. But then they just earn interest there!
<3 online banking.
And I love that suggestion because it's so true - and what a fun way to spend an hour, right?! I'm adding that to my newsletter tomorrow, along with a note to everyone to check out the comments because for real, they're the best part of blogging.
Such a good post for people to read. Sometimes it only takes five mins to change your finances. I did three five-minute things this past Fall that I hope will have major positive impact on my finances. First, I *actually looked* at the investments in my 401k and chose an investment with low expenses that mapped to the S&P 500. I used to pick the target date funds and didn’t realize the expenses were so high. Second, when benefit enrollment time came around at work, I invested in an HSA and set it to contribute the max.
That is so awesome! And also, HI and oh my god I love your blog and am in the middle of binge-reading all of your archives – I’m so happy to connect!
That’s super interesting with target date funds – I know a lot of personal finance books I’ve read have recommended them as a good “set it and forget it” option but if they’re actually that high in fees, that’s not great. I look forward to the day when my employer offers investments I can pick on for their high fees, haha! (I’ve always worked in really small companies and startups that don’t have programs like that yet – someday though! And in the meantime, stock options are like a fun gamble, haha.)