Every year, I make resolutions about the areas of my life that I would
like to improve. The changes often never
even get started and rarely make it to December 31. I’d like to help you be successful if your
goals are financial.
In a recent Sun Life Financial survey, 66% of Canadians said their debt level was the same or worse than a year ago.
Step 1 – Make
a Goal.
It doesn’t matter if it’s saving 10% of your gross (or net) income,
saving $1000 so that next Christmas the expenses do not need to go on your
credit card (due to lack of cash flow), paying off your credit card every
month, putting aside 3 months income for a rainy day, or saving money for a
special vacation. All that matters is
that it’s your goal and that it means something to you.
Step 2 –
Determine your Cash Flow
You cannot save even $50 each month, unless you know where that money is
going to come from. So this step
involves reviewing your income and expenses.
Most experts suggest that 3 months is a good snapshot. Note: If you pay for items such as insurance
on an annual basis, you need to average those costs and add them to your 90 day
expenses.
Usually, a good start for this review is by looking through your bank and
credit card statements. Remember – all you
bank statement says for cash is that you withdrew it, it doesn’t tell you
whether you spent that money on giving your children money for school pizza
lunches or on $5 Starbuck coffees.
If you would like a spreadsheet to use for this exercise, let me know
and I can supply you with one.
Alternatively check out the one available on the Hello Life website.
Step 3 –
Review your Income and Expenses
So now that you know where your money comes from and where you spend it –
you need to determine what you can adjust.
Is it exchanging Starbuck coffees for ones you brew at home or buy at
Tim Hortons? Is it decreasing your clothing or eating in restaurants
budget? Does it require an entire review
of all of your spending habits?
If you need help with this step, contact me. I can either help you or
send you to a professional who can.
Step 4 –
Implementation / Action
Money that doesn’t “exist” is easy to save. If your goal is to pay down credit card debt,
you can set up an automatic payment from your bank account to the credit card
to occur as soon as your paycheck lands in your bank account. If your goal is savings, I can help you by
setting up an account for the savings and arrange the same automatic transfer.
As we all know, nothing actually happens unless you have an action
plan. Let’s work together to implement
your financial goals.
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