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Personal Finance

A financial reset can help you stay the course in 2024

If you have a clear picture of your personal finances and tax situation, you can make informed decisions and achieve your goals—even when funds are tight

Once you have a good grasp of your financial situation, you can make more informed decisions (Getty Images/ Sanjeri)

Many Canadians were hit hard last year as inflation and successive hikes in interest rates led to higher mortgage payments. The shock was even harder to bear given that borrowing rates remained low until mid-2022, leading some people to take on large amounts of debt in a market where property prices had skyrocketed.

What will 2024 look like? “Instead of burying our heads in the sand, we need to face reality and accept the current situation,” says Paul-Antoine Jetté, CPA, professor of administration at the Cégep de Lanaudière, and co-author of La Facture amoureuse. (He is also editor-in-chief of L’enquête McSween on Télé-Québec.) “Yes, we could see lower inflation and interest rates, but we need to adopt a more sustainable approach.”

Thomas Gaudet, CPA, financial analyst at Altitude conseils financiers, agrees: “You don’t need a crystal ball to say that the prime rate will eventually come down, but in the meantime, many people who have variable rate mortgages or who recently renewed their mortgages will be running out of financial oxygen.”

To stay the course and avoid being stretched to the limit, here are six steps you can take in 2024.


What’s stressing people out, says Jetté, is the unknown. That’s why he underlines the importance of knowing where you stand in terms of your assets and net worth. This means asking yourself a number of questions, such as: What debts do you have, including mortgages and cars? What are your credit card balances and what is the interest rate? In short, what is your leeway in terms of borrowing capacity? The same goes for assets: Do you own a house? How much is it worth? Do you have a Registered Retirement Savings Plan, or RRSP? A Tax-free Savings Account, or TFSA? How much do you have in your accounts? And so on.

When you add up what you own (considering what may have gained in value, such as a house) and subtract what you owe, this often puts things into perspective, says Jetté. “If you’re a couple, it also helps to ensure that you form a united, fair, and therefore stronger financial team. If you don’t feel able to talk about your financial situation with your partner, you might have a problem because you won’t have all the information you’ll need to make decisions in the future.”


Tax is a major expense for most people, so it’s worth taking a closer look. It may seem complicated, says Jetté, but it’s simpler than you think. “First things first: Are you up to date with your taxes? Because if you’re late, a penalty may apply, with interest. Do you really want to spend your money that way?”

Beyond filing on time, you should get your tax documents in order on a timely basis. That will help you save money and produce the best possible tax return. “For example, collecting all your medical receipts is an easy task to accomplish, but if you don’t do it you’ll be leaving money on the table,” says Jetté.

Gaudet agrees. “A large part of the population, especially the middle class, is unaware of all the options available to them (First Home Savings Account (FHSA) or the Registered Education Savings Plan (RESP), for example), which reduce taxable income. The government uses them to determine child benefits and the GST/HST credit, for example.”

Depending on your situation, there are some key plans you need to know about, such as the FHSA or the RESP he says. Lower income earners are also entitled to the Canada Learning Bond (CLB). Jetté and Gaudet also note that taxpayers with very low income are often in a particularly good position to benefit from good tax hygiene, because there is a lot of assistance available.


Once you have a good grasp of your financial situation, you can make better decisions. Say you have $10,000 set aside and aren’t sure whether to contribute to an RRSP or pay off your mortgage. By contributing to an RRSP, you will get a tax refund that will allow you to contribute to an RESP, for example. To determine how a $10,000 payment would affect your mortgage payments, you would need to know your tax situation and make use of one of the many calculators available online. “You have to use them,” says Jetté.


While there is no one-size-fits-all answer for reducing your debt burden, Gaudet says it is important to start with the highest-cost debt: loans at usurious rates, credit cards, personal loans, mortgages, student loans, loans for rental properties and, finally, loans taken out for unincorporated businesses. It’s important to look at the net after-tax cost of each loan, as some types of interest can be deducted from taxable income.

There are also many retirees who would like to work part time to make ends meet, but are concerned that their extra income will be taxed and reduce their pension. However, as Jetté points out, there are government calculators available that provide estimates of the real tax impact of additional income or certain expenses.


Economic turmoil or not, both Gaudet and Jetté consider it essential to have a budget, as it helps provide a clear financial picture. For example, how much do you really spend on eating out? On your car? On your various subscriptions? “A lot of people are in budget denial because they’re afraid to start,” says Gaudet. “For one thing, their budget is incomplete because they don’t include their main expenses such as rent, transportation, food, and so on. Also, they’d rather bank on a pay raise, when they should be focusing on reducing their spending, especially discretionary spending.”

Jetté adds that a budget should include all expenses related to housing, food and work. “A large part of what’s left should go into savings, to reduce stress. When interest rates rise and mortgage payments go up, it’s reassuring to know that you have money set aside or that you have the possibility of putting some aside. When you have a budget with some built in wiggle room, this can buy you time before you have to make difficult decisions, such as selling your home. And in 2024, many people will appreciate that extra time.”


The beginning of the year is also a good time to set a financial goal, such as cutting expenses by 10%, creating an emergency fund, or saving for a big event or a down payment. The aim is to start slowly and keep it up to create a snowball effect.

In real terms, goals can range from the simplest to the most ambitious. “Take, for example, a couple that opens an RESP when their child is born and contributes the maximum amount—$2,500—every year, says Jetté. “When you count the grant portion and interest generated over 15 years or so at about 4%, they will be able to accumulate almost $70,000 by the time the child reaches adulthood.”

“Now let’s imagine that once the child has finished their studies, there are some funds left over. The parents give the money to the child, who reinvests it in an FHSA and then chooses to use the tax deduction when they have a good job and a good salary. With a bit of patience and discipline, the parents have created wealth over two generations. They may have a little less in savings when they retire (or leave a little less), but they will have helped their child at a crucial time in their life.”

As Jetté points out, there will never be one universal recipe for growing wealth. “But there are specific, practical ways to optimize your situation so that you can take better control of your finances—and in the end, create far less stress for yourself.”


CPA Canada offers a number of financial literacy resources, including publications, worksheets, and other materials to help you improve your financial literacy. Also, check these smart tips to make sure you are on the right path with your finances. And find out how to get on the right side of debt.