2018 is in the history books and you’ve got big plans ahead for 2019, right?! This is the year that you’re going to get organized financially, make sure your money is working for you, instead of you working for your money. In my experience as a Financial Advisor, one of the biggest mistakes people make is not doing a financial outlook for the year ahead.
Consider it an opportunity to take stock of where you are and where you want to go moving forward. It’s always best to do this with a financial advisor, but I am going to share 9 key things that you can do to get your money right for 2019:
1. Set clear financial goals using SMART – Specific, Measurable, Attainable, Realistic and Time
Be specific about your goals. If you want to buy a car or house then write it down and figure out how you will save for it on a monthly basis. If you want to take a trip or do renovations, set an amount that you need to make that happen. Make sure how you are going to attain those goals are measurable and reasonable. Don’t aim for a Mercedes when you earn less than $50 000 a year. Be realistic in what you want to achieve and how you are going to do it. Most importantly give yourself time. There are no get rich quick schemes that don’t come with some sort of catch.
2. Create and follow your budget.
It may sound boring, it may be something you’ve heard a million times, but it has to be done if you want to be financially successful. Create it. Follow it. It’s that simple.
3. Forget about saving – for now – if you have high interest debt.
Eliminate all debt like credit cards, loans or lines of credit. Commit to paying 3% of debt balance outstanding, anything less is just interest being paid. Once you get your debt down, then it is time to start a savings plan.
4. Diversify income sources – get your side hustle on!
So, you’ve done your budget and your dollar is stretched to the limit of your tiny salary. It’s time to be innovative and find other sources of income. Whether it’s that skill you take for granted, like cutting hair or you scour the house for kijiji stuff to post, there are so many ways nowadays to make a little coin on the side. If you have a phone, there’s an app for that.
5. Cut the Frills – it worked for the grocery store, you can do it too!
I remember I used to spend $40 on wings and beer after playing sports, which added up to $160 per month. I could have used it to pay down debt, contribute to an RRSP or RESP for my children. There are so many areas that we can cut back on in the short term and stack up the savings.
6. Lower your taxes with a T1213 form
And what is that? It is a form that allows you to reduce taxes taken off your pay cheque. It can be used by anyone contributing to an RRSP, having child care expenses, support payments, employment or medical expenses, investment loans and donations.
7. Sale, Sale, Sale
That’s how you should be shopping in 2019. Nothing at full price. If it’s not on sale, you can’t afford it. Buy in season, and that’s not just about vegetables. There are certain times of the year for car buying, electronics, mattresses, clothing items, etc. You have to be strategic about it. Christmas décor is now 80% off - buy it and store it for next year.
8. Change investments to income generating
Make sure that your money is not just sitting around gathering dust or very little interest. You want your money to be earning – whether it’s through real estate investments or stocks. Your financial advisor should be pointing you in the right direction of products that will generate results, not keep you in the same spot.
9. Don’t Have a GoFund Me Funeral
If you are alive and well, reading this article and don’t have death or critical illness insurance - go and get some now! It’s a minimal monthly cost that can relieve so much stress for your family and friends when they are grieving.
Once you get your finances organized and have a clear picture of where you want to go and how you plan to get there, it will make such a difference in your outlook in life.
Make this the year that you get your money right.
Ian Webster's nearly two decades of recognized experience at several well-known financial organizations has given him the inside track on the upsell of products such as mortgages and mutual funds and allowed him to help clients with everything from lowering their taxes to developing profitable investment portfolios.
His expertise has been featured in The Globe and Mail, Toronto Star, Toronto Sun, and Time. He has also been a featured financial speaker at many high-profile networking functions.
Find Ian online at www.financialfighter.com and on Twitter, Facebook, Linkedin, and Instagram.