Giving consideration early on in life towards your financial goals can have a powerful impact on meeting your long-term objectives. It can also help provide you with the tools you need to navigate an ever-changing and increasingly complicated financial landscape.  

Building your financial knowledge now is essential for making informed choices that can lead to a strong, sustainable retirement income down the road. 

Understand what you have 

Many employers offer some sort of retirement income savings plan. Contributing to a workplace Registered Pension Plan (RPP), group Registered Retirement Savings Plan (RRSP) or Deferred Profit-Sharing Plan (DPSP) shows that your employer is investing in you as an employee to allow you to build a nest egg. In many cases, your employer will also make contributions to your plan alongside you to help build your retirement fund even faster.  

Important note: if you are contributing less than the maximum required to get the full employer match, you are leaving money on the table and not taking full advantage of the programs your employer has for you. 

Make strategic investments 

Give your money a purpose by having specific accounts for each of your goals - and each account should be invested and have the appropriate level of risk for its purpose. For example, a well-funded emergency fund might be best-suited to an account that is accessible and risk averse (you wouldn’t want to have a delay or a high-risk investment decrease in value if you need cash right now for a plumbing emergency). Conversely, retirement funds that you don’t plan to access for decades can be invested in the markets, and those short-term market ups and downs can be ignored in favour of long-term growth. 

Managing cash flow 

Many credit unions and banks offer the ability to customize account names. You can label your savings accounts “Emergency Fund,” “Home Renovation,” or “Family Vacation” to give each account a purpose in your broader financial picture. By assigning your accounts a role, you can save and spend with intention, separating the ‘needs’ from the ‘wants’ and focusing on what is most important to you.  

Reviewing your bank account regularly can also reveal even more ways for you to cut down on spending. Do you have a recurring charge for a streaming service you no longer use? It is likely that those few dollars per month could be used to bolster another savings goal instead. Shopping around for promotional deals on cell phone or home internet plans can also lead to modest cash flow improvements, especially around big sale times like Black Friday and Boxing Day. 

Avoiding or minimizing ‘bad’ debt: 

Another dragging factor on savings can be high-interest rates on credit cards or unsecured lines of credit. Unpaid balances can cost you hundreds, if not thousands, of dollars per year. Three helpful strategies to help you pay down debt include consolidation, the snowball method or the avalanche method. 

• Consolidation involves taking some or all of your debts and combining them into one regular payment (that is best to come out the same day, or the day after payments go into your account); this also has the benefit of turning revolving debt (minimum payments) into a fixed-term loan that will be paid off after a period of time. 
   

• The avalanche method looks at each individual debt balance and pays them off in order of highest interest rate to lowest (while you continue to make minimum or required payments on all other debt to preserve your credit score). Paying off the higher-interest rate first reduces the total amount of interest paid overtime. You’ll typically see the highest interest rates on payday loans, credit cards and unsecured lines of credit.  
   

• The snowball method has you tackle the smallest balance first, and when that is paid off, that payment is then applied to the next largest balance. The satisfaction of seeing those balances disappear can give you positive reinforcement to stick with this strategy over the long term.  

Using these strategies can help you resolve any outstanding balances, and free up your cash flow so that you can avoid paying any more interest than you need to and instead put your money toward more productive uses. 

Don’t forget to regularly adjust your savings as you continue your journey. Increasing your regular retirement contributions as your income grows, through raises or career changes, helps your balance grow with you. It is tempting to use excess cash for treats and rewards in the present, but understanding how windfalls, expected or not, can influence our goals is key to a long-term successful financial future.  

Never too early to plan 

Our CSS members have complimentary access to myCSSPEN Compass®, an online retirement planning tool, to help visualize your retirement goals and offer advice on how to reach them.  

You can input your income, risk tolerance, pension information, and other assets and supporting information to help determine whether you are on track to meet your retirement goals. The tool will also provide some information on how certain account adjustments might affect your retirement goals. By making use of the tool earlier on in your career, small changes, such as increasing the amount you save can have a big impact on when you can retire and with how much.