With a new year well underway, you may have had good intentions to improve your finances. In order to get your finances in check, you need to have a plan. This plan should include living within your means, spending according to your priorities, and doing what you can to increase your income.
Start the New Year off Right
The very first thing to do is to stop spending more than you earn. Take a look at your income and your expenses, and make sure that what you make exceeds what you spend. Consider your priorities, and what’s important to you. Look at the spending you have that doesn’t match your values and financial goals. Those are the purchases you can stop making to bring your spending in line with your income.
Make a plan to pay down any debt that you have, and stick with that plan throughout the year. You want to make sure that you are getting rid of debt so that your financial resources are your own. Consider a realistic plan for paying off debt, and work on that.
Next, look for ways to earn more money. If you are concerned that there is only so much cutting you can do in your budget, or if you are looking for ways to increase your income so that you have more available cash to help you invest for the future, consider your options. You take a second job, start a side hustle, or look for passive income sources. And, if you want to earn money without doing anything markedly different from what you do regularly, you can consider using a cash back credit card.
A Few More Realistic Financial Goals
- Did you start a TFSA? If not, the good news is that you now have up to $10,000 worth of room for investing in a TFSA since you gain another $5,000 each year.
- If you'd like to pay off more of your mortgage, try switching to bi-weekly payments or simply increasing the amount you pay each time. Even better, do both if you can!
- The start of a new year is a good time to remember to check your credit reports. Once you receive them, you can calculate your credit score and look to improve your credit rating.
- When your home or auto insurance term ends, check online for lower premiums and save even more by increasing your deductible.
- Have debt to pay down? Try to get your credit card interest rate reduced to make your payments more effective at reducing your principle.
- Look for ways to save money. Doing this will free up money to add to your savings. Once you've saved in as many ways as you can, you could find more money to save by looking for other sources of income.
- Do you get a raise each year? Consider taking that increase and saving it each pay period. Using TD's e-Series Funds in your RRSP would be a simple way to boost your retirement savings.
Whatever improvements you choose to make, each small change could make a big difference between now and retirement!