DAILY FINANCIAL TIP – DAY 26 – FINANCIAL RESOLUTIONS
These daily financial tips are designed to be short ideas covering different aspects of family and business finances. They are short pieces intended to provide information to enable individuals, families and businesses to make informed financial decisions. Not all tips will apply to every situation, but over the course of a year, most financial topics will be covered. Check in regularly and share with friends and associates.
As New Years Eve draws near, many of us make a variety of resolutions. Including resolutions regarding our health, work, relationships, etc. Are financial resolutions part of your New Years resolutions? Consider including resolutions to enhance your financial well being. These changes don’t have to be significant; small changes will have a large impact long term. Consider making resolutions for your savings, investing, retirement, budgeting, planning.
Start by evaluating what areas of your finances are needing work. If you don’t know where to start, perhaps start with putting a plan in place. If not sure what to focus on, perhaps review my Day 1 blog for some ideas. Having a budget to prioritize where and how to allocate your resources is a key foundation for any plan. Everyone’s circumstances are different, so your allocations will and should vary as your family and work situations change. Could be saving for a wedding, having a child, buying a home, paying down debt, retirement.
If you have previously set up pre-authorized payments (PAP) to pay down debt or saving for a home/retirement, etc, perhaps review the amounts being allocated. If you’ve had an increase in pay at work, perhaps change your PAP amounts to reflect your increased ability and compensate for inflation.
Use this time to review both your investment holdings and insurance coverages to ensure the amounts are sufficient for your current and anticipated lifestyle needs. Ensure Disability Insurance and Critical Illness Insurance are part of your coverages. If there are gaps, arrange to meet with your advisors to adjust.
If you have recently received or are about to receive a performance bonus from work, have you established a plan on how to best allocate the funds? Whether it’s to pay down some debt or credit cards, RRSP contribution, TFSA contribution, RESP contribution. Don’t squander these monies. You work hard for your money, make it work for you.
Have you reviewed your mortgage pre-payment options? Have you considered or factored into your plan making a principal pre-payment or increasing your mortgage payment amount? Most mortgages permit payment increases. Just like making a pre-authorized payment to your RRSP or TFSA, increasing your mortgage payment amounts help accelerate paying off your mortgage easily. Mortgage payment acceleration or pre-payment usually has a greater effect paying off your mortgage than bi-weely payments.
As we start 2018, here’s wishing you and your family much good health and prosperity. Make sure financial resolutions are part of your New Years resolutions.
Share these ideas with friends and family and come back to check out daily financial tips and ideas. If there are subjects you wish covered or questions, please email me and I’ll include them in future posts.