Northern Birch Credit Union is here to support you on your journey towards financial well-being. The information in this article is provided as an educational overview. Each member’s financial journey is unique. We encourage you to talk to us – we can help you reach your financial goals.
Rising interest rates, inflation and economic uncertainty threaten financial well-being. Families struggle, wondering how to make ends meet. According to Statistics Canada, one in four Canadians do not have the resources to cover unexpected expenses (https://www150.statcan.gc.ca/). We have reason to be concerned. After COVID, inflation hit highs not seen in several decades. Though stabilizing now, Canadian families continue to feel the impact of rising costs. We struggle to keep up as few families have experienced a pay increase that matches rising costs. Too often, the first thing that drops off a family’s budget is regular deposits into savings.
Looking back, it’s important to understand the power of financial management. Our grandparents and great-grandparents exemplify financial wisdom, hard work and resilience.
Northern Birch Credit Union walks alongside members, helping them to build their financial wealth strategically, one deposit at a time. In our experience, you don’t have to start big, you just have to start.
The secret? Nurture a habit of saving.
Every family and individual is different and articulating your unique financial goals helps. Studies have shown that writing your goals down makes you more likely to achieve them.
Our team would like to share four simple but powerful components of building financial well-being. Opening a premium savings account that accrues over two percent interest and gives you the flexibility to withdraw money when needed is a start. But there are more tools available to you. Financial products like First Home Savings Accounts (FHSA), Tax-Free Savings Accounts (TFSA) and Registered Retirement Savings Plans (RRSP) are government-designed tools to help you save. Investment tools like term deposits, mutual funds and online trading are all ways to help you save and potentially grow your funds within those programs.
But it starts with you setting financial goals.
- Develop a Monthly Saver’s Mindset:
Setting Financial Goals:
Every family and individual is different and articulating your unique financial goals helps. Studies have shown that writing your goals down makes you more likely to achieve them. They need to be clear and achievable. You may want to save for your first home or for a child’s education. You may want to save for retirement, ensuring a healthy and financially stable future.
It’s important to recognize short-term and long-term goals. For instance, you may want to start building an emergency savings account, ensuring you have the resources for an unexpected expense. Or you may be dreaming about a new car or a vacation. These are short-term goals. But you also need to consider your long-term goals. This may include owning a home and building equity in real estate. Retirement may seem a long way away, but starting to save in small increments when you are young is an easy way to help your savings grow for when you reach retirement age.
Live within your means. Aligning income with expenses is an important step towards financial well-being.
Your savings goals may seem challenging when seen as a whole. But when you break down the financial resources needed to reach your goals into monthly increments, they can be more manageable.
Start by Creating a Realistic Budget
Live within your means. Aligning income with expenses is an important step towards financial well-being. Your budget should include essentials but also include “fun” money for entertainment, gifts and discretionary spending. Not considering discretionary spending puts a heavy weight or guilt trip on you when you splurge for a fancy coffee or a lunch out. Incorporating systematic savings into your budget towards your goals can make it easier to meet them.
Categorizing your income and allocating funds for necessities and setting aside regular deposits for savings gives you the freedom to enjoy life and know that you are building your financial well-being in the future. We encourage you to review your budget annually. Changes in income, circumstance and family needs must be considered as you revise your budget. Update your financial goals as you reach short-term goals and establish new ones.
B. Simple Multiplication:
The Magic of Compound Interest
Take advantage of the Northern Birch savings calculator to watch how your savings can multiply. Compound interest is a mathematical reality that multiplies the power of your savings. You are rewarded by compounding monthly interest as you receive interest on the interest gained. When you use our interest calculator, you can see how your money can grow over time.
Even modest contributions can lead to substantial wealth accumulation over time. At the core of successful wealth accumulation is consistent contributions to savings over a long period of time. Whether you start by setting aside $25 or $250, every dollar grows thanks to the impact of compounding interest.
Life is unpredictable. Consistent saving habits equip you to face challenges. They provide a buffer against more difficult periods, unexpected expenses and income loss.
Emergency Fund
A surprise car repair, replacing a furnace or appliance or a medical emergency can be difficult to navigate. Establishing a savings account for emergencies gives you confidence even in difficult periods of life.
Life is unpredictable. Consistent saving habits equip you to face challenges. They provide a buffer against more difficult periods, unexpected expenses and income loss. With a solid emergency account in place, you can focus the rest of your savings into working harder for you to meet your other financial goals.
Saving for a Home
Opening a First Home Savings Account (FHSA) helps jumpstart your dream of owning your own home and accumulating equity in real estate. Even if you eventually decide not to purchase a home, your savings can be transferred, tax-free, into your retirement savings. And, to boost your saving power, Northern Birch has a special introductory rate for first-time home buyers. You can earn 6% interest on your FHSA variable savings account deposits until June 30th.*
Our team can guide you through the options for savings, helping you choose the right tools to meet your goals. You might be surprised at how your funds can grow when you set a little aside every month. Take advantage of automatic deposits to ensure consistent savings and the benefits of compound interest.
Retirement Savings
Like all saving strategies, preparing for financial well-being in retirement starts with a plan. While retirement seems far away when you are starting your first job, it’s important to start early.
RRSPs are one tool for investing for retirement, but there are many ways to make your money work for you. It all starts with monthly habits of saving. We can’t stress the importance of automated deposits enough. Our members often tell us that even though they found the idea of monthly deposits daunting, once they started, they seemed easy.
You are in control of your financial destiny. While it may be a little frightening, understanding the tools and products available helps equip you to control your destiny.
We invite you to sit down with one of our specialists to learn about the different investment tools available to you.
C. Increased Financial Well-being
Controlling your Future
You are in control of your financial destiny. While it may be a little frightening, understanding the tools and products available helps equip you to control your destiny. Knowing you have a plan and a reliable savings strategy gives you the confidence to face the future.
Rewards of Consistent Savings
One of the greatest rewards of having a savings account is a sense of confidence today and for tomorrow.
Northern Birch is here for you. This year we are celebrating 70 and 65 years respectively since the founding of our predecessor Estonian and Latvian credit unions. Over the past decades, we have changed and grown, bringing even more services to our members and helping them save for the future.
We invite you to sit down with us and talk to us about your financial goals. We would be happy to help choose the right financial tools to help you reach your goals. Our members benefit from no-fee chequing and savings accounts and competitive rates for loans, mortgages and savings.
Call Northern Birch and speak to a Member Services Representative to set up an automatic savings plan, or meet with an Investment Specialist to help you understand the financial products available to you at Northern Birch.
*Conditions apply. Interest rates are annualized, calculated daily and paid monthly on our Premium Savings and FHSA Variable Savings accounts. Rates are subject to change at any time without notice. Please visit our website for full offer details.
