Bernice wants it all — she’s saving up for a wedding, travel and hopes to one day own a house. The 35-year-old compliance administrator is proud to say she has her financial affairs in order.

She makes $60,000 annually and shares an apartment with her fiancé in Toronto’s Annex neighbourhood. She cooks most of her meals at home, rarely buys coffee out of the house and rarely uses Ubers to get around.

“I am extremely fortunate that I graduated university with almost no student debt, so that has all been paid off,” Bernice says.

On the weekends she and her husband-to-be like to stay at home and watch movies or play billiards in the winter months. Their social lives ramp up in the summer and they go to music festivals, concerts and spend lots of outdoor time on patios with friends.

“More often than not we probably stay home or just go for a walk about town,” Bernice says.

But while Bernice is looking forward to her wedding and planning a three-week trip to Japan, she wants to know how she should prioritize her finances and save for the future and retirement. She has a TFSA that she has kept topped up and a small pension contribution she made years ago but forgot about until recently.

“I should be more conscientious of the future in terms of investing, but I’ve only ever put money in savings investments that are low risk,” Bernice says.

She says she could do a better job at planning for the future but feels some things, like owning property or investing in stocks, are out of reach, so she prefers to focus on experiences and travel.

Bernice wonders how to best prioritize her spending, savings and investments. Should she start an investment portfolio? If so, how much a month should she put aside?

We asked her to share two weeks of spending to get a better idea of her expenses.

Bernice came out of school with no student debt and that allowed her to kick-start her saving when she started working.

She does not drive a car or use ride sharing, sticking with public transit to keep her costs down. She eats at home most of the time and her big indulgence is a bag of chips or a pop at the corner store.

This has helped her to be a diligent saver, living well below her means, and maxing out her Tax Free Savings Account (TFSA) each year. However, she acknowledges she may have left some money on the table by being conservative and investing her money in conservative savings accounts.

There is nothing wrong with savings accounts. They have their place. But when you are trying to grow your money and have a medium or long-term time horizon, some exposure to stocks should be considered — especially in a TFSA where investment growth is tax free.

Someone like me can tell Bernice that stocks are a good way to build wealth over the long run. But until she understands and believes it herself, she may not buy in fully. Learning about investing is a great way to feel more comfortable investing.

And experience helps as well, including seeing your investments lose money sometimes. Losing money is not great, but is guaranteed to happen for days, weeks, months, and even years when you invest in stocks. Seeing stocks recover and generally trend higher can build risk tolerance and help an investor stay committed to realize those long-term gains, as stocks generally provide high single-digit returns over the long run.

Bernice should figure out what portion of her savings is for the wedding and trip to Japan along with an emergency fund. If that amount is $25,000, for example, and she has $100,000 in her TFSA, she can consider investing some of the other $75,000 more aggressively.

The only thing I can really pick on Bernice for is her frequent cigarette purchases. If nothing else, she should consider buying cartons of cigarettes to save money compared to buying individual packs.

Results: She spent more, but because of rent in week two. Spending in week one: $503. Spending in week two: $907.50.

How she thinks she did: Bernice had to pay rent in week two, so the total is much higher. Nonetheless, she feels good about her spending and says she is quite careful not to go over her budget.

Take-aways: Heath’s advice was very helpful, says Bernice. She found it particularly useful to see how much of her savings she should spend and invest.

While she appreciates Heath’s advice to buy cartons, Bernice is trying to kick her smoking habit to the curb.

“I’m trying to quit smoking at the moment as well, which is difficult, but aside from health implications, would be hugely beneficial to my savings,” she says.


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