Happy New Year! Our Top 10 Financial New Year’s Resolutions

Happy New Year! Our Top 10 Financial New Year’s Resolutions

Happy New Year! Just like the holiday season, yet another year has zoomed by.
 
The dawn of the New Year provides us all with the natural opportunity to pause - reflect on all that has happened in the past year, assess the current state of our lives, and envision how we want the upcoming year to go.
 
For many Canadian, New Year’s resolutions typically include promises of eating healthier, exercising more, and getting your financial affairs in order. While we, unfortunately, can’t help you with those first two, helping you get your financial affairs in order just so happens to be our specialty.
 
There is no time like now to start practicing healthy financial behaviour. Below, we have compiled a list of the top financial New Year resolutions that will help put you, and your money, on the path to success for 2020.

1.  Review your financial goals:  Take a look at your financial goals and the progress that you have made to accomplish them in the past year. Seeing your progress will help to keep you motivated to achieve your goals. Further, identifying areas where you may have strayed can provide you with the necessary wake-up call to get back on track.

2. Adjust your plan:  Once you have reviewed your financial goals, it is time to adjust them for the 2020 year. Your life will always be evolving in different ways, so your personal and financial goals need to reflect these changes. For example, if you received a promotion and pay raise in 2019, consider increasing your regular contributions to your RRSP or TFSA. If you welcomed a child into your family in 2019, maybe it’s time to consider starting to save for their future education by opening an RESP. As your life changes, your goals need too, as well.

3. Write down a list of all assets and liabilities:  Writing down a complete list of all your assets and liabilities is a good exercise that provides you with a holistic view of your overall financial situation. From this, you can assess if you are hitting your savings goals, if you need to alter your debt repayment schedule, if you have extra money you can invest, among countless other things.

4. Review your investments:  How have your investments done over the past year? If they did not live up to your hopes or expectations, is that because the market had a hard year, or was it the result of poor investment decisions? Furthermore, your asset allocation mix (i.e. 40% stocks, 60% bonds) should be continuously reviewed and updated. This is because of your risk tolerance, investing horizon, among other factors will change as you age.

5. Automate your finances:  This is one of the most helpful financial New Year resolutions because once set up, you can essentially forget about it. Automating your finances is the most efficient and reliable way to ensure that you aren’t missing any payment deadlines and are making regular contributions to your various accounts. Further, when everything is automated, you are less likely to notice the money leaving your account, ultimately saving you not only time and energy but stress, as well. If your finances are already automated, be sure to update your contributions based on how your goals and needs have changed. For example, if you have recently decided that you want to buy your first house in the next three years, consider increasing your RRSP contributions so you can take advantage of the Home Buyer’s Plan.

6. Basic financial housekeeping:  Take the time to review and organize your various accounts. Make sure that all powers of attorney, wills, and beneficiary designations are up-to-date and all important documentation is organized and accessible to relevant parties.

7. De-clutter your life:  De-cluttering your home and wardrobe can lower stress levels and give you some extra cash. Sell stuff you don’t need anymore and use the proceeds of the sale to get you closer to reaching one of your larger goals, whether that be saving for a house or contributing to your travel fund.

8. Re-evaluate your monthly bills:  Review your monthly expenses to see if you can cut back on any services or if are paying more than you should be on them. For example, if you don’t watch a lot of television, consider cancelling your cable service and only paying for internet. Call your various service providers to inquire about getting a better deal. If they can’t offer you a lower price or better package, consider switching to a provider who can. Saving a little bit here and there can save you a lot of money in the long run; you don’t get without asking.

9. Improve your financial literacy: Increasing your financial education I the first step to making smart financial decisions. Set a goal to learn a little bit every month about any financial topic – investing, budgeting, debt management, etc. Investing some of your time to enhance your financial education, is investing in yourself and your future.

10. Align your personal goals with your financial goals: Where possible, think of creative ways to align your various personal goals with your financial goals. For example, if, following the holidays, you decide you want to cut back on your alcohol consumption for January, take the money that you would be spending on drinks and put it towards a greater goal.

 
It is true that every day is a new chance to establish good habits and work towards enhancing your financial wellbeing. There is something special about the New Year, however, that tends to give many people a burst of extra motivation to get their financial affairs in order. While New Year's resolutions can be tricky to stick to, taking January to do simple tasks such as automating your finances and negotiating lower monthly bills, will set you up for a full year of better finances.
 
On behalf of the entire team at the Bongard Wealth Advisory Group, we wish you the best of luck in the New Year. We can’t wait to see what 2020 has in store.