Financial Institution

Banking - Get Your Infrastructure Set Up Correctly

Personal finance has many layers. As a result it can become overwhelming for many Canadians. What is one partial solution to this problem? Simplicity. Keeping things simple will make things easier to understand. This will allow you to make better decisions. And this should lead to better results over time.

As you get started on your financial journey one relatively easy way to drive an enormous amount of simplicity is to consolidate most of your banking needs with one financial institution.

Bank account: chequing, emergency, savings etc.
Investing accounts: TFSA, FHSA, RRSP, non-registered
Credit card

A mortgage would be the exception. Use a reputable mortgage broker and go with the financial institution that will give you the best deal. This will usually save you thousands of dollars over the lifetime of the mortgage.

Warning: Consolidating all of your financial products with one institution will take a fair bit of up-front work. It will take time. And it will probably be a pain. But don't let that stop you. Because once you are done you will be set - and you will reap the significant rewards for the rest of your life.

Why consolidate with one financial institution?

What are some of the benefits?

Ability to easily see all of your financial information in one spot.
- Bank accounts: chequing, emergency, savings etc
- Investment: TFSA, FHSA, RRSP , RESP and non-registered
The logic used to execute transactions will be the same for all accounts (bank and investment).
It will be super easy to:
- Toggle from one account to another.
- Transfer money from one account to another (like from chequing to your investment accounts).
- Find year-end tax information for all accounts (it will be in the same location).

Life Long Education and Mentoring.

Create leverage. Get all of your family members banking at the same financial institution. This will provide you with the ability to learn from and help each other as you embark on your financial journey. Need help with how to do something or where to find something? Call a family member who can give you quick step by step instructions. That is priceless.

My family uses RBC exclusively for bank and investing accounts - their products are very good. Young family members have no fee RBC credit cards. We all help each other with questions about how to do things. Get financial literacy out of the closet.

Open your bank account

Our family uses:

The student account has no monthly fee for full time students. The regular account has a monthly fee of $11.95, or $5.95 if you have 3 financial products with RBC.

Do you need to open other accounts?

Yes. The number of bank accounts you have should align with your financial plan.

Chequing account - For your everyday banking needs
Account #2 - Emergency fund
Account #3 - Travel fund?
Account #4 - Other savings objectives?

Why have multiple accounts?

To get the money out of your everyday bank account. If it is not there, you won't miss it. If it sits ithere, you will be tempted to spend it.

Emergency Savings Fund

It is very important to have an emergency fund. And that is because emergencies happen.

Having this will stop you from

Falling into credit card debt.
Being forced to liquidate an investment at the wrong time.

How much do you need?

A minimum of 3 months of expenses.