With the New Year right around the corner, it’s everyone’s favourite time of year: New Year’s Resolution time! Beside shedding some extra pounds, improving the family’s finances is another popular goal. Unfortunately, this is often easier said than done. Many people sign up for the gym in January, but by March they’ve already thrown in the towel. To improve your chances of success, it’s important to set goals and device an action plans to achieve them. Here are three financial goals to aim for in 2016. We’ll have three more goals in part two of series next week.
- Track Your Spending
Most people know they should be saving money, but the temptation to spend is often too much. The Wealthy Barber says you aim to save 10 percent of your income – the problem is most people are saving a lot less. The sad reality is about half of Canadians are living paycheque to paycheque. Call it lifestyle inflation, a lack of financial discipline or whatever you choose, the fact remains a lot of Canadians simply aren’t saving enough.
That’s why it’s so important to track your spending. By tracking your spending you can see where all your disposable income is going. There are many ways to track your spending – apps, computer programs and a good old fashioned pen and paper. Once you see how much you’re spending on recurring expenses like cable TV, it might encourage you reconsider and cut your expenses.
- Get the Most Out of Your Investments
New Years is the perfect time to take a look in the mirror and get your finances in order. This is the ideal time to examine your investments and see if there’s a way you could be getting a bigger bang for your buck. For example, while GICs are a safe investment, they also limit your opportunity for growth. Depending your time horizon and your tolerance for risk, your investment portfolio may need a makeover. Don’t worry, you’re not alone. We can sit down and help you figure out if your portfolio needs some fine tuning.
- Make Your Kids Money Smart
Have you had “the talk” with your kids? No, I’m not talking about the birds and the bees, I’m talking about money. If you want your kids to follow in your footsteps and be financially responsible adults like mommy and daddy, it’s important to teach them about money.
Money is a tough concept for children to grasp. If your kids ask you why you can’t go to the ATM and get more money, it’s time to teach them about the value of a dollar. An allowance is a good place to start. It teaches them there’s a reward for good behaviour, as well as what money can buy.
There you have it, three New Year’s resolutions to start the year off right. Save some of the champagne for next week as we look at three more resolutions for financial success in 2016.