A new year brings new opportunities to improve your financial performance and learn from your experiences from previous years. Keep the following in mind when preparing your financial resolutions for the new year:
- Determine Your Goals: One of the most important ways to ensure your best performance possible is to set clear and attainable goals. For example, repaying your debt in full may be a goal, but if it’s not realistic for this year, set a goal that’s more achievable, like paying off a specific portion of your debt. Set a date by which you can realistically accomplish your goal, and set monthly reminders in your calendar to help your goal stay top of mind. When you succeed in accomplishing it, you will feel proud and accomplished. Setting a date can also be beneficial when you and your advisor setup scalable repayment measures that complement the rest of your financial portfolio. When it comes to financial resolutions, clear and achievable goals are absolutely necessary.
- Figure Out Which Debts to Tackle When: Debts come in many sizes and forms, and interest can accumulate at different rates. Not all debt is “bad”, and your advisor can help you put together a plan to pay off your debts in the sequence that will serve you best. In some cases, carrying debt on a credit card can accrue higher interest rates than other types of debt. In this case, it would be prudent to focus on paying off credit-based debts first. Other debts can be restructured and/or be put on hold. With a properly planned portfolio, you will be well-aware of the debts you should be paying off this year, and the debts that should not be paid off this year.
- Budget and Protect Yourself: Life is meant to be lived, and money is meant to be spent, but we always need to set some aside for a rainy day. Work with your advisor to put together an appropriate annual budget for 2017, including spending allowances, mortgage payments, monthly savings and RRSP/TFSA contributions. Your advisor can help you invest in insurance policies that will help protect you and your family in various circumstances you may encounter, and will work these policies into your financial portfolio to keep you on track.
- Read Up on Financial Resources Regularly: There are many financial resources out there to help you keep up with your goals and refine them over time. Some books you may want to read this year are The Intelligent Investor, One Up on Wall Street, and Common Stocks and Uncommon Profits. Be sure to also check the WDB + Associates blog regularly for timely tips on topics that matter to you.
- Pursue High-Risk Investments Without Speaking to Your Advisor: With some economists warning about the possibility of a global recession in 2017, now is not the best time to take risks with your investments without speaking to your advisor first.
- Ignore Your Problems: If you lack insurance coverage, are facing debt troubles, or you’re unsure if you will have enough money set aside for retirement, these are all things that can be taken care of in 2017.
- Delay Taking Action: The longer one waits to take action on financial matters, the more challenging resolving debts or achieving saving goals will be. If you’re healthy today, insurance policies can be purchased at very affordable prices. That said, in your future, you may encounter health risks that will make insurance policies more expensive. No matter the circumstances, the time to plan for your financial future is now, and every moment is a new chance to start again.
For more information on the do’s and don’ts of financial resolutions, feel free to send an inquiry to firstname.lastname@example.org or call us at 416-646-2433.