It’s a “new year, new you.” Are you ready to hit the ground running in 2018? For many of us, setting new year’s resolutions is a popular tradition. We set goals for ourselves to lose weight, eat healthier and quit smoking. Many of us also set goals around our money, whether it’s saving a down payment towards our dream home or paying off debt.
While new year’s is an ideal time to set goals for ourselves, it’s also a good time to see if your personal financial house is in order. Here are three good financial habits to develop in the new year to help ensure 2018 is the best year yet!
Updating Your Budget and Net Worth Statement
Do you have a written budget? You’re ahead of most Canadians. Give yourself a well-deserved pat on the back. While having a budget is great, it’s equally important to update it. Life is constantly changing. A new job, the birth of a child and the purchase of a new home are all things that will affect your finances. Without taking the time to update your budget, how will you know if you’re on track to meet your personal financial goals?
Equally important is updating your net worth statement. A net worth statement offers a snapshot of your finances. It looks at your assets and liabilities (debts). Updating your net worth statement can be motivating. As you pay off your debts, you’ll see your net worth go up. This can motivate you to work even harder in 2018 to make sure it’s the best year yet.
Reviewing Your Will and Insurance Needs
Did that you know that only about half of Canadians have a will? If that doesn’t scare you, here’s another fact: many Canadians are underinsured. I know wills and insurance aren’t the most exciting topics to talk about, but it’s important to give them the attention that they deserve. The last thing you want to do is pass away without a will. Your family will already be grief-stricken by your loss. You wouldn’t want add the financial stress of dealing with your estate without a will.
If you have dependents, life insurance is a must. Many of us have life insurance policies through work, but it’s often not enough. Take the time to review your insurance coverage. Insurance isn’t always the easiest to understand, so speak with an experienced insurance broker who can help you navigate the lingo and figure out the policy that makes the most sense for your family and you.
Reviewing Your Debts
Is your mortgage up for renewal in 2018? Are you carrying any debt tied to prime rate, such as a variable rate mortgage or line of credit? Unfortunately, very few of us has a crystal ball, but with the Bank of Canada hinting that there will be several interest rate hikes in 2018, now might be the time to think about locking in your mortgage or refinancing with another lender. By taking the time to speak with your mortgage broker, you can figure out the best course of action that makes the most sense to protect yourself from higher rates.