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BMO Bank of Montreal

February 04, 2012 08:00 ET

BMO Retirement Tips of the Day: Know Where You're Spending Your Money and How it is Invested

TORONTO, ONTARIO--(Marketwire - Feb. 4, 2012) - As the February 29th deadline approaches to make a contribution to a Registered Retirement Savings Plan (RRSP) and as part of its ongoing commitment to improving financial literacy, BMO Financial Group will be providing daily retirement tips during the month of February from BMO Retirement Institute Head Tina Di Vito's new book 52 Ways To Wreck Your Retirement…And How To Rescue It.

Tip Number Seven:

Know where you're spending your money

When planning for retirement, making and following a budget is key. The first steps in designing a budget are to determine what your current daily, monthly and annual spending habits are, and then decide where you should be allocating your money. The following are some tools to help you understand your spending:

  • Develop a personal annual budget to understand how much money you expect will come in on a year-over-year basis and what portion of this you intend to spend or save. It is important to review it regularly and make adjustments where necessary.
  • BMO MoneyLogic, available free to BMO customers, is an online tool which enables customers to set and track savings goals and provides immediate insights into their spending and savings habits.

Tip Number Eight:

Know how your money is invested

There are endless investment options available to Canadians. Rather than trying to learn everything there is to know about every product out there, get familiar with some of the most common products on the market. This will help you make better decisions.

Understanding that there is a difference between loaning money to a company, such as Guaranteed Investment Certificates (GICs), Principal Protected Notes (PPNs) or bonds do, and investing your money in equities directly or in vehicles such as mutual funds, or exchange traded funds (ETFs), will help you achieve investment success. Focus on understanding these products and then build your portfolio with the help of a financial professional.

For more information on retirement: www.bmo.com/retirement

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