How To Build Your Financial Wellbeing & Wealth In Canada

This article isn't about overnight success or shortcuts to riches. Instead, it's about embracing the truth: building wealth requires making wise financial choices today to pave the way for a financially healthy future.
Bruce Hodges
February 21, 2024
Apply to Parachute and start your journey to financial wellness.
Apply now
Table of Contents

How To Build Your Financial Wellbeing & Wealth In Canada

Building wealth is a goal that resonates with many Canadians. Who wouldn't want to take charge of their finances and enjoy the freedom that comes with financial security? While the desire for the financial security wealth brings is universal, the path to achieving it in Canada can seem daunting.

Financial resources are cluttered with promises of "get rich quick" schemes and financial products for sale. But here's the reality check: these promises often lead to disappointment and financial setbacks. 

That's why it's crucial for you to approach the journey to financial well-being and wealth with caution and realism. 

This article isn't about overnight success or shortcuts to riches. Instead, it's about embracing the truth: building wealth requires making wise financial choices today to pave the way for a financially healthy future.

Key Takeaways

  • Budgeting, setting goals, and saving are foundational elements of your financial well-being.
  • Understanding debt, taxes, and credit is crucial for making informed financial decisions.
  • Build healthy habits like a consistent saving routine, budgeting, and continuous financial education.
  • Avoid detrimental financial behaviours such as impulse spending, ignoring debt obligations, or overextending yourself financially.
  • Utilise personal finance websites, books, podcasts, and platforms like Parachute for valuable financial information and guidance.

Starting With a Solid Foundation: Financial Wellbeing

Building a strong financial foundation is key to achieving your goals and securing your future. Here are some essential steps to improve your financial well-being:


Budgeting allows you to prioritize your expenses and ensure that you're living within your means. Take control of your finances by creating a budget that outlines your income and expenses. Track your spending habits and identify areas where you can cut back to save more money. 

There are many different forms and styles of budgeting, so it’s important to try a few and find one that actually works for you.

Setting Goals

Define your financial goals and establish a plan to achieve them. Whether it's saving for a down payment on a house, paying off debt, or planning for retirement, having clear objectives will keep you motivated and focused on your financial journey.


Make saving a priority by setting aside a portion of your income each month. Building an emergency fund is essential to cover unexpected expenses and provide peace of mind. Aim to save at least three to six months' worth of living expenses to protect yourself from financial setbacks.

How much savings should I have around 40 years old?

Around middle age, it's important to have a solid financial cushion to support your long-term goals and provide security in case you face unforeseen circumstances. It’s generally recommended to have assets worth around three times your annual salary. However, the truth is that this isn’t the reality for many Canadians.

If you’re around middle age and your savings account doesn’t look like that, don’t panic. It's never too late to start saving, and even small contributions can make a significant difference over time.

We recommend focusing on where you are, not where you think you “should” be. Everyone’s situation is different, so your savings at this age will vary depending on many factors.

Developing Your Financial Literacy

By enhancing your financial literacy, you’ll gain the tools and confidence needed to make informed decisions about your money. Let's take a look at some important areas you can focus on: 

Understanding Debt

Debt is borrowed money that must be repaid over time, typically with interest. It's a financial obligation that arises when you borrow funds from a lender, whether it's a bank, credit card company, or another financial institution. 

There are various types of debt, including credit card debt, student loans, mortgages, personal loans, and auto loans.

Interest rates and repayment terms play crucial roles in how debt functions and how it impacts your finances:

  • Interest Rates: Interest is the cost of borrowing money, expressed as a percentage of the total amount borrowed. The interest rate on a debt determines how much extra you'll pay beyond the principal amount borrowed. 
  • Repayment Terms: Repayment terms outline the conditions under which you'll repay the borrowed funds. This includes the duration of the loan (e.g., 5 years for a personal loan, 30 years for a mortgage) and the frequency and amount of payments (e.g., monthly, biweekly). 

Debt can significantly impact your overall financial health in several ways:

  • High levels of debt can lead to financial stress and anxiety, as you may struggle to keep up with payments and worry about your ability to meet your financial obligations.
  • Debt repayment often requires a portion of your income to be allocated towards monthly payments. This reduces the amount of disposable income you have available for other expenses or savings goals.
  • Debt can affect credit score, which in turn affects your ability to secure favourable interest rates on future loans or credit cards. A lower credit score may also impact other aspects of your financial life, such as renting an apartment or obtaining insurance.
  • Excessive debt can limit your financial opportunities, such as buying a home, starting a business, or pursuing higher education. 
  • Many debt providers charge additional fees on top of the Annual Percentage Rate (APR) or interest you promise to pay. Ensure you know the additional fees so you know your full payment obligations. 

Understanding Taxes

Tax is a compulsory financial charge imposed by the government on individuals, businesses, or other entities to fund public expenditures and government functions. 

Taxation can have significant impacts on your income and financial decisions:

  • Taxes reduce the amount of income you take home from employment, investments, or business activities. Understanding your tax obligations allows you to plan and budget accordingly to ensure you can meet your financial goals.
  • Tax considerations should be an integral part of your financial planning process. Strategic tax planning can help minimize your tax burden, maximize tax deductions and credits, and optimize your overall financial situation.
  • Taxes can influence investment decisions, as different types of investments may have different tax implications. For example, certain investments may offer tax advantages.

Understanding Credit & Credit Scores

Credit refers to the ability to borrow money or access goods or services with the promise of repayment in the future. Credit is typically extended by lenders, such as banks or credit card companies, who assess a borrower's creditworthiness based on factors like income, credit history, and financial stability.

A credit score is a numerical representation of an individual's creditworthiness, indicating the likelihood that they will repay debts as agreed. Credit scores are used by lenders to evaluate the risk of lending to a particular borrower and determine the terms of credit extended, such as interest rates and credit limits.

Some factors that affect your credit score include:

  • Your history of making on-time payments on credit accounts, including credit cards, loans, and mortgages, is the most significant factor affecting your credit score. Late payments or defaults can negatively impact your score.
  • The total debt service ratio, refers to the ratio of your outstanding credit balances to your total available credit. Keeping credit utilization low, ideally below 30%, demonstrates responsible credit management and can positively impact your score.
  • Having a mix of different types of credit accounts, such as credit cards, installment loans, and mortgages, can positively impact your credit score. Lenders like to see that you can responsibly manage various types of credit.
building wealth in Canada | Parachute

Building Good Financial Habits

Developing healthy financial habits is essential for achieving long-term financial stability and success. By incorporating these three habits into your financial routine, you can build a strong foundation for long-term financial success and security:

  • Consistent Saving Routine: Establishing a regular saving habit is crucial for building financial stability and achieving your long-term goals. Set a specific percentage or dollar amount of your income to save each month, and automate transfers to your savings account. 
  • Budgeting: Keeping track of your expenses and creating a budget allows you to understand where your money is going and make informed financial decisions. Use tools like budgeting apps or spreadsheets to categorize your spending and identify areas where you can cut back or reallocate funds towards your priorities. 
  • Educating Yourself: Financial literacy is key to making sound financial decisions and navigating the complexities of personal finance. By continuously learning and staying informed about financial matters, you empower yourself to make smart choices that positively impact your financial well-being. Reading this blog is a good example of something you could do to build financial literacy!

Financial Behaviour To Avoid

While adopting positive behaviours can help you build a strong financial foundation, it's equally important to avoid detrimental financial habits that can hinder your progress. By steering clear of these pitfalls, you’re one step closer to achieving your financial goals:

  • Impulse Spending: Giving in to impulsive purchases can quickly derail your financial plans and lead to unnecessary debt. Avoid making spur-of-the-moment buying decisions by practicing mindfulness and delaying non-essential purchases. 
  • Ignoring Debt Obligations: Ignoring or neglecting your debt obligations can have serious consequences for your financial health. Missing payments or paying only the minimum amount due can result in late fees, increased interest charges, and damage to your credit score. It may feel overwhelming to even think about your debt, but knowledge is power in this case. Understanding your debt obligations and taking action to tackle them will have positive effects in the long run.

Key Financial Resources

When it comes to building financial health and wealth, Canadians have access to a variety of resources that can provide valuable information and guidance. Here are some resources that can help you on your financial journey

Personal Finance Websites

Books on Personal Finance

Financial Podcasts

Experienced Financial Assistance

Parachute is one fincare company that aims to help Canadians improve their financial health and well-being. We provide debt consolidation loans, personalized financial roadmaps, access to cash-back rewards, and educational resources to help you achieve your financial goals.

The 50 30 20 Rule

The 50 30 20 rule is a simple budgeting guideline that suggests allocating your after-tax income as follows:

  • 50% to Needs: Essentials like housing, utilities, groceries, transportation, and minimum debt payments.
  • 30% to Wants: Discretionary spending on non-essential items like dining out, entertainment, vacations, and hobbies.
  • 20% to Savings and Debt Repayment: Savings for emergencies, retirement, and future goals, as well as debt repayment beyond the minimum required payments.

Following this rule can help you prioritize your spending and savings goals while maintaining a balanced financial lifestyle. Adjust the percentages based on your specific circumstances and financial priorities.

If you’re dealing with a high-interest loan, you may be struggling to balance debt repayment with your other spending and savings goals. Parachute may be able to help.

Improving your financial health can often feel like a daunting task, especially if you're unsure where to start or lack the necessary expertise. Let Parachute help you create a financially free future. Learn more today!

Bruce Hodges
Bruce, Founder and CEO of Parachute, worked for several of Canada’s top Banks, published research for the Canadian Bankers Association, and taught E-commerce Strategy in Wilfrid Laurier University’s MBA program. His first start-up built credit solutions for the likes of National Bank, Fair Isaac, and Ford Credit globally. Prior to starting Parachute, Bruce was COO of Foresters Financial, and EVP Transformation at CIBC, one of Canada’s top 5 banks. Bruce founded Parachute to disrupt the financial wellness space taking on payday, and high interest predatory lenders, with the intent to bring at risk Canadians back from the brink to good financial health.
Follow us:

More from our blog:

Start your path to financial well-being today.
Get a loan that gives you cash-back.

We truly believe financial well-being should be accessible to all Canadians. Our three step program empowers, educates, and rewards our customers. We offer the only loan where someone can leave with more savings than when they started.

Parachute is not a a bankruptcy, consumer proposal or debt management proposal company.
© 2022 WHF Inc. All rights reserved. Myparachute.co and the Myparachute.co designs are trademarks of White Hat Financial Inc. (‘WHF’) and used here under licence.