Budget planning can help home buyers achieve financial goals

As real estate professionals, you have an exciting job helping Canadians achieve a major goal in their lives: buying a home. As such, your work makes you uniquely positioned to help strengthen the financial literacy of Canadian home buyers by giving them the tools they need to achieve their financial goals.

The fact is personal finances continue to be the greatest source of stress for Canadians—significantly more than work, health or relationships. According to new data from the Financial Consumer Agency of Canada (FCAC)’s Canadians and their Money: Key Findings from the 2019 Canadian Financial Capability Survey, while the majority of Canadians (65%) are keeping up with bills and payments, 35% are struggling to do so.

FCAC has a whole host of free tools and resources to help Canadians manage their money wisely and reduce financial stress. Our mandate is to protect financial consumers by regulating the banks on matters of consumer protection, and by strengthening their knowledge, skills and confidence to make informed financial decisions.  As such, our tools can help your clients establish some basic behaviours that will improve their personal finances at key milestones in their lives.

The importance of budgeting

According to multiple studies, budgeting is an important first step to achieving financial goals, like buying a home and paying a mortgage.

A budget is a simple and highly effective way to help your clients live within their means and have control over their finances, particularly once they start making mortgage payments and managing household expenses. Having a budget that lays out sources of income and monthly expenses can help your clients determine their needs versus wants, set priorities for making purchases, and commit to a savings and debt reduction plan. It also helps them withstand economic shocks.

New interactive tool that makes budgeting easier

FCAC recently introduced a free interactive tool called the Budget Planner. It’s designed to help people start and maintain a budget. It’s unique in the way it draws on behavioural insights into how people make financial decisions to create an interactive experience tailored to their situation.

The Budget Planner also allows people to learn and improve their financial situation by providing budgeting tips, guidelines and alerts, and helping them determine next steps with suggestions and useful links. They can also compare their budget with those of other Canadians in similar life situations.  

To learn more, watch this short video.

CREA is also making it easier to become homeowners with the new Home Buying Journey Edition of the Home Buyers’ Road Map. This resource is perfect to share with clients, helping them to mitigate unwanted roadblocks or detours during the home buying process.

Canadians who are buying homes are at a critical juncture, where a few simple behaviours could help them reach their financial goals and reduce their financial stress. As real estate professionals, you can help point people in the right direction with the right tools and resources, including FCAC’s new Budget Planner.

Help your clients determine what they can afford using the REALTOR.ca Affordability Calculators. You can also share REALTOR.ca’s handy Tips for Buyers and Tips for Sellers

Ruth Stephen has worked in strategic policy with the Canadian and Ontario governments for the past 16 years, and currently directs the Research, Policy and Education Division at the Financial Consumer Agency of Canada. She currently resides in Ottawa with her family and enjoys to travel in her spare time.

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