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Invest smarter Investing

What’s your investor profile?

What’s my investor profile?

Not your standard Hinge question, but figuring this out will help guide the who, what, where, when and how of your investment strategy. To get a better idea of your investor profile, you should consider the following: 

  • Age and personal situation: In theory, it’s easier to take risks when you’re young and (still) have few responsibilities. Do you have a steady income? Do you have children? What are your upcoming financial goals (buying a home, travelling, buying a car, etc.)? These are all questions that you should think about before investing.
  • Investment horizon: The longer your investment term, the more risks you can afford to take, since they will be smoothed out over time. Retirement will have a much longer investment horizon than going to Mexico next winter.
  • Risk appetite: Are you comfortable with taking risks? How do you feel about the idea of ​​financial loss? Or, would you rather have more security for your investments, even if your returns are potentially lower?
  • Financial knowledge: Do you understand the basics of finance and investing or are you a complete novice? If you’re a complete novice, don’t worry! We have some tools to help you get comfortable with the more common concepts and terms.

Take a few minutes to really answer the above questions. Then we can determine your investor profile: conservative, moderate or aggressive.

I’m rather… careful

You fit the Conservative profile if you value the security of your savings, are risk averse, or have short-term plans.

In this case, you’re better off putting your money in investments that are lower risk, such as savings accounts, bonds or GICs. The downside of investing in these assets is the low rate of return, which currently is even lower than inflation.

The Conservative profile is composed of 100% money market investments, which are short term debt obligations. The goal: to take a very little risk, while focusing on safety.

Note: The Conservative portfolio is recommended for investors who wish to access their savings in the short-term (1 year or less).

I’m rather… moderate

You have a balanced profile if you prefer a happy medium between security and performance. You’re not afraid of risk, but you don’t want to put all your savings on the line.

In this case, a diversified portfolio of  investments will  help to smooth out risk. For example, you can look at investing in a combination of stocks and bonds. Low-cost, well-diversified exchange-traded funds (ETFs), which are a collection of stocks or bonds, can be a good way to balance out your risk. . 

At Moka, our Moderate portfolio offers medium risk-taking and an average return, for a medium-term horizon (buying a car, financing a move, etc.).

Note: A medium-term horizon is generally between 2 and 5 years. 

I’m rather… adventurous

You fit the aggressive profile if you don’t fear the risks of loss and want to maximize your returns over the long-term.

For this type of profile, we recommend investing an important portion of your funds in equities To reduce the volatility of this investment, you can build your portfolio as follows: 70% to 80% stocks, and 20% to 30% bonds. Over the long-term, stocks are one of the most profitable asset classes. By focusing on these, you can maximize your expectation of earnings. But remember, there’s always a risk of loss when you’re investing, no matter what precautions you take.

At Moka, our Aggressive portfolio is made up of 80% equities and 20% bonds. It allows you to achieve higher profitability, while accepting the risk of potential losses.

Note: The Aggressive profile is for those with a long-term investment horizon  that is at least 5 years.

Now that you’ve gone through this exercise, you can better define your investment strategy according to your profile. Keep in mind that both your profile and strategy can change over time as your needs, projects, and financial and personal situation change.

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Inflation: What does it mean for you?

Remember when shops closed in March 2020? And then they just… didn’t reopen? For like, a long time? Something about a pandemic?

That closure and others like it were necessary to keep people safe. But those closures also had expansive economic impacts that Canada is now attempting to recover from. 

To put it in a nutshell: in order to encourage strong economic activity within Canada, the Bank of Canada decided to leave the cost of borrowing money low. This meant people would  borrow—and crucially, spend—more money, keeping currency circulating in our economy. 

But choices like this one can bring on inflation, which can be a good thing or a bad thing. This post looks at what inflation is, what makes it happen, and what it means for us. 

What is inflation?

Our friends at Investopedia explained it simply when they wrote “inflation is the decline of purchasing power of a given currency over time.” No faff with those guys. 

Often, inflation is illustrated by imagining a grocery basket full of eggs, bread, and… wine. (This “basket” has to include a variety of products and services to be a good measure of inflation, and is often represented by the Consumer Price Index, or CPI.) This basket we’ve got will cost us $10, say. 

When inflation increases at a nonoptimal rate (i.e., when there’s too much inflation), the cost of goods rises. We might return to the grocery store to purchase the exact same basket of goods only to find the cost is now $15. 

This means that our power to buy goods, per unit of currency, has diminished. This is how inflation “erodes” the real value of cash, and cash holdings or savings, over time. 

Economists have been expecting an uptick in inflation; its absence is in part what encouraged the Bank of Canada to take the actions it did and leaving interest rates low. 

But this choice, and a variety of other factors, means we could see a rise in the rate of inflation in the next several years.

What causes inflation?

There are three general types of inflation: demand-pull inflation, cost-push inflation, and built-in inflation. An optimum level of inflation is actually a good thing, because it encourages economic activity and employment. 

Demand-pull inflation happens when an economy is well stimulated, and consumer demand for products actually outpaces the production capacity for those goods. As a product becomes more scarce, its price can rise. A classic example of  supply and demand.

Cost-push inflation is the opposite. This happens when the cost of production rises, and that cost is passed along the supply chain to the consumer with the ultimate price increase of said product. 

Built-in inflation is related to what can be called the wage-price spiral. When consumers see the cost of living rise—even a little—they assume it will continue and demand higher wages to compensate. These higher wages are reflected in the cost of production, which, again, drives prices, and so on. 

In Canada, we’re seeing bits of all of these types of inflation. This article itself could be considered a product of built-in inflation. Here we are, telling you that based on our research, increased inflation could occur in the next few years; this could drive you to change your behaviour. 

Similarly, as the Bank of Canada keeps the cost of borrowing low, consumers will likely continue to spend, potentially driving up prices. And ongoing problems in the global supply chain—remember when the big boat got stuck?—could force higher production costs down the supply chain onto the shoulders of consumers. But only time will tell!

What does inflation mean for me?

Inflation can have several impacts on the average consumer, both positive and negative. If inflation falls, it means your purchasing power grows. If it rises, it means your purchasing power falls. 

Inflation is always a possibility, and there are a few things you should be aware of. There are a myriad of potential impacts of inflation, but here are three you might find more likely to impact you. 

Consumer purchasing power may fall

Your wine, coffee, eggs, bread, furniture, car, rent, and imports (for example) may cost more than they do today. Some experts say it’s possible to insulate your savings against inflation by not holding cash, but rather other instruments like equities. Holding specific financial products may help counteract the erosion caused by inflation, but every scenario is different. 

Talk to a financial  advisor or broker if you’re worried about your holdings. 

Borrowing costs may increase

To counteract inflation, the Bank of Canada may opt to raise interest rates. If you have a variable interest rate on a personal loan, student loan, line of credit, or mortgage, this may impact you, as the interest rate on your balance owing may increase. Talk to your bank or broker if this concerns you. 

Spending may increase

When interest rates climb and inflation gets out of control, people tend to withdraw from the market. Worried about the economy’s future, they feel they should save what they already have. 

But in the early stages of inflation, oddly, the opposite tends to happen. 

With continued inflation in the forecast, consumers often actually increase their spending. This makes sense: the value of the dollar will likely fall, but the real use-value of a pair of new running shoes with room to grow for little Tommy or a new coat for wee Jimothy that’ll fit until  he’s older stays the same. The idea is to buy now, when prices are lower, investing in goods that won’t themselves lose value. But this increase in spending can actually drive inflation, as in the demand-pull scenario. 

Inflation: we can’t avoid it. That’s why it’s important to have a good understanding of economic trends like these so we know how to best respond and adapt as our economy recovers in unpredictable ways. 

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Why you need a financial plan

We all have goals. Whether career, life or family, there’s usually something that each and every one of us envisions for ourselves. Owning our own home, being our own boss, or retiring somewhere warm—where there’s no snow, amirite?

When it comes to financial goals, achieving them is usually easier said than done. Enter the financial plan. A financial plan is your personal roadmap to financial security and, eventually, financial independence. Think about it like a business plan: In order to succeed in business projects, companies will lay out a business plan to help them bring their projects to fruition and ensure their business sustainability. Financial plans act the same way as a business plan in that they will guide you at every step of your financial life.

Here are some of the benefits of having a plan for your financial goals.

  • Build a better, more secure future for yourself

With a financial plan in place, you’ll have a better understanding of your spending habits compared to your income. This will help you track your expenses and increase your net savings every month. 

  • Have enough for an emergency

A good financial plan should include an emergency fund that will help you cover any unexpected expenses or support you in case of an income loss. It’s usually recommended to have 3-6 months of your living expenses in your emergency fund.

  • Prepare for retirement

Your financial plan should not only include your short-term goals like saving for a trip or a car, but also your long-term goals like saving for retirement. 

It may seem tedious and—let’s face it, no fun at all—to start saving for your retirement when you’re young. However, the sooner you start saving , the better prepared you’ll be for a comfortable retirement. Your older self will thank you.

The road to financial independence

Imagine waking up every morning and being able to choose how you want to spend your time: do you want to work today or do you want to take advantage of the beautiful sunny day to go for a walk or hike instead?

This is exactly what financial independence is all about: having the choice to work or not.

Being financially independent means having saved enough money to cover your essential and leisure expenses. You no longer need to go to the office to pay your bills.

Since everyone’s situation is different, we recommend you meet with a financial planner to figure out what’s needed for you to achieve financial independence.

Unfortunately, there’s no blueprint to reach this goal: your financial situation and essential and leisure expenses may be different from those of your neighbour.

An expert can also help you establish a savings and investment plan to achieve financial independence in the most efficient way.

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A Canadian Dream for everyone

So what is the Canadian Dream?

Our friends at Mogo wanted to find out for themselves, and recently carried out a survey with members of the Angus Reid Forum, where they found that Canadians consider financial security and climate health as essential elements of the Canadian Dream.

Financial security certainly helps Canadians pursue their goals, but achieving these goals all starts with access to financial services. As financial technology companies continue to develop innovative tools that empower Canadians to save and invest more, they enable each and every one of us to unlock success and pursue our Canadian Dream. 

The financial challenges that we face are different from our parents’ generation, so we need different financial tools. Luckily, we have more financial options available to us than ever before, and when used correctly, they can get us closer to achieving the dream. 

Canadian Dream study: Key findings

From an online sample of 1,000 Canadians, the study found a clear picture of the top priorities for Canadians today.

When asked what they think the most important aspect of the Canadian Dream is to them, the number one choice for Canadians was ‘financial security’ (33%). In second place was the ‘freedom to follow personal dreams’ (24%), followed by buying a home (11%) and living without discrimination (11%), with ‘having a family’ coming in last (6%).

Asked what is most important to them personally, 33% of Canadians said, ‘providing for their loved ones,’ followed by ‘enjoying life right now’ (29%), ‘protecting the environment’ (13%) and ‘building wealth’ (11%).

Based on the above, we can see how essential economic stability is for Canadians to achieve what’s important to them. 

How can Canadians achieve this dream for themselves?

Financial technology companies exist to make financial services more accessible and affordable for Canadians. With the wide array of tools available, it’s now more possible than ever before for Canadians to achieve their dream. We’re excited about what Mogo’s building to help Canadians gain control over their spending and get on the path  to building real wealth—all while helping the planet at same time.  

Mogo’s goal is to empower Canadians to build a secure future—both in terms of personal financial security and a healthy planet. And with the help of the MogoCard, it could be easier than ever.

For many Canadians, building wealth to secure a comfortable future is the most important aspect of achieving their Canadian Dream. The path to financial security might include never spending more than you earn, paying down debt fast, and then investing what you don’t spend (but everyone’s circumstances are different).

The MogoCard is here to help Canadians on their journey to financial security. Loading up your MogoCard with the amount of money you know you have available to spend gives you a set spending budget. Plus, you can stay on budget with helpful push notifications that are sent every time you make a purchase. According to another Mogo survey, some MogoCard users reported saving an average of $201 per month just by using their card, and 91% said the card helps them better control their spending.1 

That could be put towards an extra debt payment, or a bigger monthly investment. 

With financial security and climate health being deeply interconnected, how Canadians manage their money can play a big role in achieving the Canadian Dream. Mindful consumption could help Canadians build wealth responsibly, so you can still live the life you want while saving up for your future (and helping to protect the planet).

This is why Mogo’s built a climate focus into many of their products. Take the MogoCard, for example, for every purchase made with the card, Mogo will plant a tree on your behalf with the help of their friends at veritree. Planting just 10 trees a month could make you climate positive by removing more CO2 from the air than the average Canadian produces. That’s only 10 taps of the MogoCard per month!2 It’s a smart way to spend money while helping to fight climate change.

The Canadian Dream is simple

All of this taken together, the Canadian Dream is a simple one. Canadians want to be able to live comfortably and securely in a healthy climate that doesn’t put them or their families at risk.

These two tenets of the Canadian Dream are deeply interconnected, and access to financial services that help Canadians manage their money plays a central role. 

Just like each of us is unique, so are our financial situations. Taking a few minutes to understand the tools and services that are available to us, can set us up for financial success, and maybe even the Canadian Dream.  

Mogo Inc. is the parent company of Moka Financial Technologies Inc. (“Moka”), and Mogo Finance Technology Inc. (“Mogo”) is an affiliate of Moka. This blog is provided for informational purposes only, is not intended as investment advice, and is based on findings of a study/survey conducted by Mogo Inc. from September 10-14, 2021, with a sample of 1,000 online Canadians, outside Quebec who are members of the Angus Reid Forum. The study/survey was conducted in English only. The precision of Angus Reid Forum online polls is measured using a credibility interval. In this case, the poll is accurate to within +/-3.1 percentage points, 19 times out of 20. All sample surveys and polls may be subject to other sources of error, including but not limited to coverage error and measurement error. If you want to read more about the key findings of the study, those can be found here.

*Trademark of Visa International Service Association and used under licence by Peoples Trust Company. Mogo Visa Platinum Prepaid Card is issued by Peoples Trust Company pursuant to licence by Visa Int. and is subject to Terms and Conditions, visit mogo.ca for full details. Your MogoCard balance is not insured by the Canada Deposit Insurance Corporation (CDIC). MogoCard means the Mogo Visa Platinum Prepaid Card. To apply for any Mogo product, you must open a MogoAccount and pass identity verification. MogoAccount is currently only available to individuals in Canada (excluding Quebec).

1-Based on an online survey of active MogoCard users by Mogo Inc. conducted between July 13, 2021 and July 16, 2021, with 1,446 respondents to a combination of multiple choice and fillable text box questions. 91% of respondents agreed that the MogoCard can help them better control their spending. 66.5% of respondents reported that they were spending less on discretionary spending now that they were using the MogoCard, with respondents reporting that they believed to have an average savings of $201 per month (based on 902 respondents who specified an amount and excluding 60 respondents who did not specify any amount).

2-An average Canadian emits approximately 42,000 lbs of CO2 in one year. Each tree will absorb approximately 500lbs of CO2 over its lifetime (approximately 25 years). For every purchase made with the MogoCard, a tree will be planted. If you used your MogoCard for 10 purchases each month, 10 trees would be planted. If 10 trees were planted every month for a year, that would be 120 trees, and those 120 trees would absorb a combined total of 60,000 lbs of CO2 over their lifetimes (25 years), making the average Canadian climate positive. Learn more: Blog. 

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Invest smarter Investing

Meet Jean-Francois Goyette, CFA, Moka’s Portfolio Manager

If someone wants to start investing, what’s the first thing they should know?

It’s never too late to start investing; the best time to start is today. And you don’t have to be rich either! Nowadays, there are plenty of options available (like Moka!) that will help you invest your savings, or help you save to invest for the long term, without prior financial knowledge.

That said, you should still get familiar with things like general terminology, account types, and how to read a statement, in order to make better decisions and understand what’s happening with your money. 

What do you need to get started?

You need an internet connection, a few dollars, a few minutes … and patience!

We always hear about risk. How can a first-time investor manage risk?  

First, you have to ask yourself how risk tolerant (or risk averse) you are. How would you feel if your portfolio lost value, how would you react? Can you afford losing some (or all) of the money you invested? 

Money that will be needed in a short period of time should be invested in conservative investments.

Also, don’t put all your eggs in the same basket, diversify your portfolio, and don’t chase “get rich quick” schemes. Remember, if it’s in the news, the opportunity is probably gone already! 

Professional money managers are broadly unsuccessful trying to time the market. As the saying goes: Time in the market is more important than timing the market. And don’t trust your brother-in-law who’s bragging about making a fortune investing in meme stocks; he’s most probably not mentioning those other times when he lost money! 

How can someone decide how much to invest?

A general best practice with budgeting is to save at least 10-20% of your monthly income, but you should really save as much as you can, keep some amount for an emergency fund, and invest the rest of it. When retirement comes, you’ll thank yourself and appreciate the wonders of compounding returns! 

If you’re not sure if or when you’ll need the money, there are different options that let you withdraw it whenever you need to without penalties, so don’t let it sleep in your chequing account!

What impact does inflation have on investments?

For starters, inflation is the rate at which the price level for goods and services is rising, generally as a result of the value of a currency falling, but also as a result of supply/demand forces. It’s most commonly measured by the Consumer Price Index (CPI). In general, too much inflation will be a drag on the economy.

Inflation can be positive for those holding tangible assets, like real estate or commodities, since it raises the value of those assets. However, higher inflation will harm savers because the purchasing power of the money they have saved will erode over time. As such, securities with fixed, longer-term cash flows like bonds will tend to underperform in a rising inflation environment. On the other hand, it can benefit borrowers, as the value of their debts will shrink over time, on an inflation-adjusted basis.

Stocks are considered to be a good hedge against inflation, as its effects are priced into stock values, although this won’t be true for all sectors of the market. Investors wishing to protect their investments from inflation should also consider other asset classes like gold, commodities, and real estate investment trusts (REITs), that can benefit from rising inflation.

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How to prioritize your savings goals

A down payment or a new car: which takes priority in your savings plan?

Canadians often have complicated, even competing, financial goals. 

Saving for retirement, a down payment, this year’s vacation and a new couch? If you’re struggling to do any of these things efficiently, you’re not alone. 

Assigning priority to our savings goals—and designing saving strategies to complement this priority—is no easy task. But it’s necessary if we want to reach our goals as quickly as possible. Here are a few tips to help along the way.

For the purposes of this article, we’re assuming that you don’t have any debt to pay off. If you do have debt—that’s OK! Everyone’s situation is different so it’s important to do your own research and make decisions based on your personal circumstances. That’s the smart thing to do anyways—you know your finances best!

Determine the cost of your goals

The first step? Figure out the cold, hard facts.

Want a new car? What is it actually going to cost you—payments, interest, insurance, gas and all? 

Maybe you want to go on vacation. Think big picture: a trip to Paris is going to cost more than just a plane ticket, hotel, and a pass to the Eiffel Tower. You’re going to need transit fare, a budget for dining out, and probably some extra money for souvenirs. Oh, and don’t forget the exchange rate!

What about purchasing a home? Maybe as a first time home buyer, you’re eligible to purchase a home in Canada with only 5% down. But is that worth it? You may be charged more in interest over time, or face greater penalties if you default on your payments. Is it actually cheaper to purchase with 10% down? 

Once you’ve got the figures—and be realistic here!—you’re ready to start prioritizing.

Rank your goals based on necessity

Next, think about necessity. 

It’s a good rule of thumb to first save for emergencies. If you don’t have an emergency fund, you’re vulnerable to sudden expenses like a broken down car, a leaky roof, or even medical bills. Saving this lump sum first enables you to quickly get onto your real savings goals—with added peace of mind!

Then, thin the herd. Do you really need to go to Paris this year? Honestly—what about next year?

Ranking your goals by necessity is not intended to suck the fun out of your goals. But it’s a simple fact that dividing your income up into several portions for several savings goals will slow down your progress on all of them. 

So, try asking yourself: do I need a new car right now? Yes? Maybe I should move the Paris trip to next year and double down on buying a new car sooner. 

Set deadlines for your savings goals

This tip is probably the most important when it comes to prioritizing your savings goals—and deciding which strategies to use to reach them.

The idea is simple: when are you going to need this money? The answer to this question will determine how much you need to save and which tools you need to use. 

If you’re saving to replace the transmission of the car you use to get to work everyday, you would probably want to allocate as much money as you can to this short-term goal. This might look like re-allocating money from elsewhere in your budget to increase the amount you can contribute this month, growing your principal savings balance. 

If you’re saving for a down payment on your first home, by contrast, you’re probably looking at a couple years of focused, consistent saving. 

In this case, it probably doesn’t make sense to save every single spare penny, leaving no funds for fun, vacations, or other “wants”. You still need to be able to live your life. Instead, you might consider opting into a tax free savings account (TFSA) which you use to invest into low cost exchange-traded funds (ETFs). Investing your savings—even over the course of five or six years—can really contribute to its growth. 

Meanwhile, your retirement fund is also a different beast. If you’re retiring in 40 years, you’re probably going to be counting on the magic of compound interest. It probably doesn’t make sense, therefore, to pour *every* *single* *dollar* into your retirement savings starting today. 

Instead, you may want to find a reasonable percentage of your income to contribute every single month. But because you’re on a much longer timeline, this amount might be lower than what you’d contribute to a medium-term down payment savings account or a short-term car repair account. 

Saving is about strategy

To summarize, short-term savings goals are the least able to take advantage of amazing tools like compound interest, and as such, these probably need more capital contributions up front. The longer the term of your goal, the more you can simply set it and forget it. 

Using these tips and your budget, you can figure out how much money you should be directing into which savings account every month. As always, consistency is key. But being thoughtful about your savings strategy and accurately prioritizing your savings goals is a close second. 

You got this! 

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Emergency fund: Why you need one

There’s an astonishing amount of content on the internet that says you don’t need an emergency fund. But in all likelihood, that isn’t true. No matter how great your insurance is (or how expensive it is!), an emergency fund is always something good to have on hand. 

You need an emergency fund. Every Canadian does. Luckily, these funds are some of the simplest to amass and the easiest to maintain. 

What is an emergency fund?

An emergency fund is a fixed amount of cash that is kept on hand for use only in emergencies. 

These funds are generally saved up only once, and then topped up as the funds are used. They’re not something you contribute to forever.

These funds are intended to pay for unexpected expenses that require immediate action and that aren’t otherwise covered by Canada’s social security net, like employment insurance or medicare. 

Emergency funds are designed to help prevent you from going into debt, or from being unable to pay for something you desperately need. They enable you to handle surprise expenses without tapping your savings.

How much should I save in my emergency fund?

This number is different for everyone, but the ideal emergency fund would pay for six months of your living expenses, assuming you had absolutely zero income during that period. 

This might sound like an intimidatingly large number to save, but once you have it, you can rest assured that losing your job or needing a car engine replacement wouldn’t put you heavily in debt. 

Many Canadians live paycheque to paycheque, and any sudden strain on their finances could jeopardize everything. With an emergency fund, you have a cushion to fall back on. 

To calculate your ideal emergency fund value, add up the monthly cost of the things you need to live, and multiply by six. These items may include:

  • Your monthly food budget, possibly excluding dining out and alcohol purchases
  • Your rent or mortgage payments
  • All insurance payments, such as home, car, health and pet insurance
  • Utility bills, including phone and internet bills
  • At least your monthly minimum debt payments, but ideally, 1.5x that amount as minimum payments do little to actually pay down your debt

If you lost your job tomorrow and weren’t going to find another position for six months, you would need to treat your emergency fund with care. For many Canadians, losing income would require families to rein in expenses.

It’s important to be realistic about what it would cost you to live comfortably but perhaps sparingly for several months and start there. 

What are emergency funds for?

Emergency funds are for expenses you’ve probably encountered before and have had to scramble to manage, or have had to withdraw money from your savings to cover.

These include things like:

  • Insurance deductibles following a car or home accident
  • Dental or eye care which is either an emergency or simply required but not covered by your insurance
  • Big home repairs, like a leaky roof or cracked foundation
  • Deductibles and related expenses for pet health care, like emergency surgery
  • Or even a new laptop if yours breaks and you need one 

Emergency expenses are one of life’s givens (along with death and taxes). The best way to handle those expenses is to be prepared in the first place. Then, when you’re faced with a scary expense, you know there’s money set aside for just that reason.

It’s a win-win. Emergency funds are good for your financial health and your peace of mind.

How do I create an emergency fund?

When saving an emergency fund, it’s important to be thoughtful about your strategy. 

For example, saving up this cash in your chequing account may expose it to accidental use. Therefore, it’s important to find a safe place to keep it (not in your mattress or a hole in the backyard, though, k?).

You may choose to open a savings account for your emergency fund. When selecting an account, ensure that:

  • You pay very low or no fees, 
  • There are no penalty fees for withdrawing funds at any time, 
  • You earn interest on the money you save.

Here are some more tips on building your emergency fund from the Government of Canada.

Moka’s automatic roundups are another way to help you build your emergency fund and savings. Your spare change is automatically rounded up and invested in a fully-managed, diversified portfolio of exchange-traded funds (ETFs), making saving money easy and effortless. Plus, you can speed up your savings by setting up recurring weekly deposits or multiplying your roundups. 

Once you’ve selected your saving strategy, determine how much you’d like to save every month. Budget for this amount, and be consistent in your savings. With that, you’re well on your way. 

After you’ve reached your desired amount, you may choose to reallocate your monthly savings to another savings goal. If you use your emergency fund, top it up. Rinse and repeat.

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Spend less

5 ways to spend less online

Over the past few years, online shopping has become increasingly more common. It soared when the pandemic hit, leaving most of us in lockdown with no choice but to shop online.

This massive boost in online shopping has been burning holes in our wallets. For better or for worse, the internet and social media are major sources of temptation. Clicking a link to buy something takes almost no effort, and adding just a few dollars more to get free shipping is even more enticing. So, it’s easy to overspend and lose control of our finances.

We’re here to provide you with a few helpful tips on how to spend less online without totally missing out on all the fun.

Unsubscribe from newsletters and promotional emails

This is the ultimate trap! When it comes to getting emails from our favourite online stores, resistance is often futile. To avoid some of these irresistible-yet-unnecessary purchases, there’s only one solution: unsubscribe from promotional newsletters.

You can avoid receiving these emails in the first place by unchecking the box that says “I want to receive the newsletters” every time you buy something online. Often, the box is checked by default (how sneaky!). This move will help you avoid some of these impulse purchases which are often fueled by sheer boredom. To limit the temptation even further, you can also force yourself to limit browsing online shopping sites to once or twice a week.

Another tip: Set a maximum budget for online shopping (for example, $100 a month) and make sure to stick to it.

Think before you buy

Have you fallen for a new dress? Think that sleek juicer you saw on Instagram will look great on your kitchen counter? Before clicking the “buy” button, give yourself a “cooling-off” period of several days (or even several weeks) to make sure you really need whatever has caught your eye.

Why this works: if you’re still thinking about your potential purchase after a week and are sure you really need it, indulge yourself. If, on the other hand, the dress or juicer that got your attention has left your mind, it’s probably not worth it. Over time, you’ll learn to distinguish compulsive shopping from buying that arises out of a genuine desire or need.

Make a list of your needs

Consider jotting down all the things you really need in a list. For example, new running  shoes to replace your worn out ones, a dress for a friend’s wedding, noise-cancelling headphones to better concentrate, etc. This exercise will allow you to understand exactly what you need so you can better understand the difference between essential buying and impulse buying. 

Learning to make this distinction will not only give your wallet a break, but is also a better choice for the planet since you’ll be cutting back on mindless consumerism—which leads us to our next point!  

Choose second-hand items

If you need something in particular, consider buying it second-hand. The second-hand market is booming, with an estimated value between 35 and 50 billion dollars. Many brands are getting on board by launching second-hand online platforms, and almost all sectors are getting in on the action: clothing, electronics, smartphones, furniture, etc.

Not only does buying second hand save you money and increase your purchasing power, but it’s more sustainable and better for the planet. By buying previously-owned items, you’ll still get that great feeling you get when shopping online, but with a less harmful impact on the environment.

Take advantage of cashback programs

What’s cashback? Cashback refers to getting a commission after making a purchase (usually online). Basically, the more you spend, the more money you get back. Some cashback sites, like Rakuten, offer commissions of up to 5% of the purchase price. Once the payment is made, the cashback is transferred to a dedicated fund. If you make large and/or regular purchases, cashback is definitely worth it!

Additinatelly, more and more banks now offer bank cards with cashback advantages, which allows you to earn a commission on purchases made with specific brands. 

Moka also offers cashback through Perks, where you’ll find deals and offers from brands you love, like Apple Music, Uber Eats and Indigo Books & Home. Just make sure you shop through the Moka app and the cashback will be deposited in your original Moka goal and automatically invested. 

Cashback shouldn’t make you buy more, but it’s a welcome bonus that makes shopping online slightly more affordable.

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Managing debt: Where should you start?

When it comes to tackling your debt you might find yourself wondering, where to start? This is totally normal! It’s easy to feel overwhelmed but with a few first steps, you can create a repayment plan that will set you on course to becoming debt free. 

The first step is to list all of your current debts. This includes not only your loans and credit card balances, but also your unpaid utility bills, phone bills or even a loan you took from your cousin’s neighbour’s colleague months ago. 

Having an overall picture of your debts ensures that you don’t forget any creditors when creating your debt repayment plan.

The next step is to determine your ability to repay your debts. To do this, you need to analyze your budget by listing all of your expenses, and whether they’re essential or discretionary. This will allow you to see how much you have left each month to pay off your debts comfortably.

Finally, prioritize one debt at a time, this way you can  focus all your efforts on eliminating them one by one. You should still continue to make your minimum payments on your other debts during this period so that they don’t affect your credit report.

This leads us to our next question…

Which debt should you prioritize first?

You should always prioritize the debt with the highest interest rate, since  they cost you the most. 

It’s important to know that your debt payment is broken down into two parts: one part of your payment is the interest payment, which goes to pay the interest fees, and the other is the capital payment, which pays the principal (the original amount borrowed). The higher your interest rate, the higher your interest payment will be, and the lower the capital payment to actually pay down the principal.

Note that the principal payment is your real payment toward your debt. So, when the interest portion of your debt payment is higher than the capital payment, it will take you longer to pay off your debt. That’s why higher-rate debt should be tackled first.

If you’re deciding between two debts with equal rates, choose the one with the smaller balance. Remember, paying off debt isn’t  a sprint, but a marathon. You need to break down your ultimate goal of paying off debt into smaller goals to keep the motivation you need to get through your plan. That’s why paying off your smallest balance first (when the rates are equal) will motivate you to keep going.

If you have multiple high-interest debts, it’s recommended that you use the Avalanche strategy to accelerate your debt payment. With this strategy, any time you pay off one of your high-interest debts in full, the freed-up money that would have been used for that debt payment is allocated to the payment of your next highest interest rate debt and so on. As you pay down each debt, the extra money will increase over time, which will help you get out of debt faster.

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Rent and food: How much should you be spending?

Here, we take a look at how much you should really be spending on rent and food and what you can do to lower these fixed costs.

How much should I be paying per month on food? 

Eating. Groceries. Cooking. We all have a love-hate relationship with food for a myriad of reasons. Planning your next meal can sometimes be fun, while other times, not so much. No matter how or where we consume it, we’ve all wondered: am I spending too much on food?

There’s no one size fits all answer to how much should be spent on groceries since how much food you need varies from one household to the next. Your food needs may be different from those of your neighbour: for example, a family of two adults and four children will have different needs than a person living alone.

The Credit Counselling Society estimates that you should spend between 10 to 15% of your budget on food. This means between $4,000 and $6,000 per year for a person earning $40,000.

If you feel that your food expenses exceed this percentage, here are some tips to help you spend less in this category:

1. Cook in large batches: This not only saves you time but also prevents you from wasting food. You also avoid buying pre-made meals during your busier times.

2. Avoid pre-made meals: Cooking for yourself is not only healthier but also better for your wallet.

3. Shop around for specials: Always be on the lookout for price reductions to save money. To do this, try using the Flipp app, which scans local grocery store specials every week.

4. Avoid processed foods: These are generally more expensive than raw foods. It’s also  better to chop, grate or grind food yourself to save a few bucks.

5. Plan your meals for the week and make a list: Having a plan will help you manage your expenses and budget your grocery spending. 

Am I paying too much for rent?

Housing expenses (rent, utilities etc.) are a significant part of everyone’s budget, so it’s important to pay close attention  and how much you’re spending on them every month. 

Rent prices vary from one city to another. For example, the average price of a one bedroom apartment in Vancouver is 2,100$ per month, compared to 1,350$ in Montreal. So, be sure to use comparables with the options offered in the same city.

To make your search easier, try using Zumper. It’s both a search tool for available apartments and it analyzes their prices.

If you think you’re unable to find an apartment or rent price that fits your budget, you can  always try house hacking: find a friend,relative or  colleague to share your apartment.

This will not only reduce your rent costs but also allow you to split other bills, like heating, electricity, internet—and even some grocery expenses.