Tuesday, January 2, 2018
10 Money Resolutions That Will Make Your 2018 Better Than 2017
Today is the first official day of 2018. January 1st is still part of the previous year because we didn’t work and many of you spent the day hungover. Now we are back at it and let the daily routine begin. A big question many of us must ask ourselves is: What’s going to be different about 2018? I am not a big New Year’s Resolution guy, but I am in favor of taking stock of one’s situation every year. I like to use the Christmas Holidays as a chance to review the previous year and try to improve on it for the next year. Money is always a place where growth is needed. I think January is a great time to get in place some solid money habits for the upcoming year. I have for you 10 Money Resolutions that will help you make 2018 better than 2017. We all have room for improvement so let’s get at it starting now.
1) Implement a Budget
While the term Budget frightens many, most credible financial minds agree that having a budget will help you greatly in achieving your financial goals. A budget can be as simple or complex as you want it to be. You can use very detailed budgeting apps like Mint or You Need A Budget (YNAB), but even something as simple as a pen and paper work as well. Simply keep track off all your fixed expenses and subtract them from your income. The rest is what you have to play with. Divide that number into the areas for which you wish to spend your money. These are your variable expenses. Your variable expenses should always stay under your excess money every month. If not, that means you are going into debt. Another important point to note is that savings should fit somewhere into your fixed expenses.
2) Vow off Credit
I use my credit card quite often, so it may sound hypocritical that I think you should vow off credit. I always make sure I can pay my balance at the end of the month. If you are finding it hard to do this, then you must vow off credit. This is always true if you have existing credit card debt, especially a large amount of it. The bleeding must stop sometime, so if the plastic is killing your cash flow, cut the card. When a budget is in use, this becomes far easier.
25 Reasons to Cut Up Your Credit Cards – Hope and Cents
3) Debt Freedom Forever
It should be everyone’s goal to become debt free in 2018. Depending on the amount debt you are in, this might not be possible. You should at least have a plan put in place that will move you closer to the goal of debt freedom. Debt is the most negative thing there is when it comes to your cash flow. If you are paying even something as small as $200 monthly towards debt, you are hurting your future. Make a plan to get debt free as soon as possible. Your life will change dramatically for the better.
4) Create or Grow Your Emergency Fund
The nasty part about debt is that it begets more and more debt. You don’t have money, so you put it on the line of credit. You now have to pay off the line of credit but have no money for that, so you put your groceries on the line of credit. The cycle is gross. One sure fire way to not be in this predicament is to have an emergency fund. This is cash easily accessible in case something comes up, which it almost always does. This year work towards saving towards an emergency fund. Something as simple as $20 a week will add up to over $1000 by the end of the year. If you have one, add to it so you can feel more at ease with your finances.
Starting an Emergency Fund – My 5 Step Process – Budget Boss
5) Start Investing Your Money
Albert Einstein said that compound interest is the eighth wonder of the world. “He who understands it earns it. He who does not pays it.” Yes, he was a very smart dude. You do not get rich without investing your money. Having your money invested does not have to be scary. In fact, it should not be scary at all! If you have fear of investing money, then you have not been explained the risks properly, so find someone that will do that. Everyone is different and there are investments for every type of personality. From the thrill seeker to the cautious types, everyone can make some money off their money. Make it a goal this year to have your money working for you.
6) Open a Tax-Free Savings Account (TFSA)
Everyone and I mean everyone, should have a TFSA. There is absolutely no better place in existence to put your money than a TFSA. The reason is quite simple, it’s Tax-Free! Your money can grow, and you never pay a dime in tax! Many people I know have numerous investments and have no TFSA. My question is to them: Why does that make sense? Every other type of investment is taxed, so why would you not put your money in a place that isn’t? Do you like paying Tax? Of course, you don’t, no one does. Open one now and start putting something every paycheque into it. It’s the best investment choice around.
Investing in a Tax-Free Savings Account should be a priority for most Canadians – Money Sense
7) Save for Retirement
I think everyone should also be saving for retirement. Even if you are receiving a pension you should be saving for retirement. The reason is simple: Nothing is certain in life, so planning is crucial. That plum job may not be there in 30 years. You may live longer than expected. You may also want the freedom to do what you wish in retirement, a freedom that only comes with savings. I have clients who are very young and putting something as small as $25 bi-weekly into an RRSP. Whether it is RRSP or TFSA, make a vow to put something away for the day where you won’t want to work anymore. If you don’t do that, you may not have any choices in your later years.
8) Cover Your Behind
I have no dependents, no wife, and no debts and I find it extremely important to own Life Insurance. Just like a TFSA, I think everyone should own some form of Life Insurance. The same is true for Health, Disability, and Critical Illness coverage. Just like savings, insurance contributions can be as big or as small as you want them to be. It all depends on the need. If you have a family that depends on you, the need is greater. If you don’t, the need is usually smaller. There is always a need though so find out what yours is and spend some money on what’s most important, covering your butt.
You Think Insurance is a Waste of Money? 5 Reasons Why You Are Wrong! – Budget Boss
9) Make More Money
Well, duh right? It may seem hard or even impossible, but I think it should be a goal of all of ours to make more money in the upcoming year. This is especially true for those in lower income brackets. The less money you have, the fewer options you have. Finding new streams of income or making more money where you currently are, is crucial. I once had a job working 10 hours a week that was just for spending money. This was on top of the 50 hours I was already working at my primary job. I saw a hole, and I filled it with work. Then I filled my bank account with money, true story.
10) Give Back
As I get older I see more and more the importance of giving back to the community from which I came from. This could mean donating your time or donating your money. It could mean helping your family, friends, or complete strangers. We all have it in us to give back something. No one is self-made as it takes the guidance and help of others to allow us to flourish. Recognize that and give some of what makes you special to others. You may find that it makes you richer than you could ever imagine.
2018 has just begun and it is our chance to make next year’s Christmas reflection a good one. What will you be saying about 2018 come next December? Will you be the one posting the meme of 2018 kicking your ass? Or will you look back and smile at all the progress you’ve made? Let’s take the steps now to make this year the best yet.
Thanks for joining us as we kickoff 2018 here at Budget Boss. Join in tomorrow as we tackle a month by month task list for the year ahead. If you would like to get started on your 2018 money resolutions, send me a message at joe@budgetboss.ca. Have a great day Bosses!
“Resolutions are a wonderful thing if we can keep them, but many resolutions go by the wayside because we have not done anything different with our mindset.” – Monica Johnson
Email – joe@budgetboss.ca
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