With the beginning of each new year comes the time we set goals for ourselves. We promise to join a gym – this is the year we’re going to run a half-marathon or learn a new language – this is the year we’re going to work in a foreign country or just be more present in the moment – this is the year we just “be” and not “do”.
Some goals we keep and others just fall by the wayside. Like anything, goals are more often achieved with a plan in mind. Which is why when it comes to your personal finances the sure way to achieve financial freedom is to have a plan.
With that in mind, did you start creating your personal finance goals for 2019? If the answer is, you’re not sure where to start, here’s a checklist that might help you get started. Choose 3 or 4 goals you can realistically focus on and then we’ll work on achieving them:
1. Make sure you have positive cash flow. Not sure if you do? Look at 3 to 6 months worth of banking statements and go over the money that goes in and the money that goes out every month. If you have more money going in then you have positive cash flow. THIS IS THE CORNERSTONE to financial success. Without it, there’s no point in going through the rest of this list.
2. Do you have the right insurance for your situation right now? Without it, all your planning can go up in smoke should something unforeseen happen.
3. Eliminate credit card debt. You don’t have to tackle this all at once but have a plan to chip away at it steadily.
4. Know your Net Worth. It’s one of the most important numbers you’ll ever need to know.
5. Check your credit score report
6. Start a savings plan. If you have extra money at the end of the month, put it away for a rainy day by creating a pre-authorized contribution directly from your chequing account to your savings account each month.
7. Start planning and preparing for your taxes now! Being prepared and planning to reduce your taxes could save you hundreds of thousands of dollars over your lifetime.
8. Max out your TFSA (tax-free savings account).
9. Max out your RRSP (registered retirement savings plan)and use this calculator to determine your tax savings.
10. If you have kids, start an RESP (registered education savings plan). The government will throw in 20% of your contribution each year up to $500.00.
12. Set retirement goals for yourself and have a plan to achieve them and lastly:
13. Find a financial advisor who will work with you to achieve your financial goals.