New Year's Resolution

4 January, 2016

Looking for a New Year’s resolution? Try this…

Enjoy the chocolate, the burgers and the fries, and consider doing something truly substantial and sustainable this year – make your financial plan the priority for 2016. It’s true, focusing on your finances is a good idea at any point, however you may find it easiest to implement at the beginning of a new year. I have compiled a list of options for you to consider what will benefit you the most.

Spend less than you earn.
Don’t underestimate how important this step is. No matter what your income is, you cannot get ahead if you spend more than you earn. To get on track, start with a family cash flow to see where your money actually goes relative to where you want it to be going. Once you know this, you can decrease the spending in areas that are not a priority in order to create the cash you need for savings and other items important to you.

Pay off debt.
High interest, non- deductible debt is a big obstacle to getting ahead financially. Look at any outstanding debts and consolidate them to lower rates if possible. Allocate more money to paying off the higher interest rate debt first, once these are extinguished; consider directing extra payments toward your mortgage.

Save for the future.
Most people need to save for retirement. How you choose to save will depend entirely on your personal situation. Whether you opt for any combination of: an employer sponsored plan, your RSP, TFSA, Cash account or non- market related investments, it is important to allocate a percentage of your income to your retirement savings or other long term investments before anything else. Continually purchase attractive investments at reasonable prices, and try not to lose focus when things appear not to be working. “The best time to invest is when it is extremely difficult to summon up the courage to do so. This is usually when the market is relatively low and the outlook is murky.” Jim Slater.

Review your insurance.
If you have dependents and debts, chances are you need insurance. You need to review your situation and your coverage to ensure you have the appropriate type, the appropriate amount, and you are paying a reasonable price. Leaving it to chance could result in paying far more than you need to, or worse, you may be left uninsured when you really need to be.

Update your will and power of attorney.
You should have a will that reflects your current situation and a power of attorney to represent you and your desires. Do not put this one off. If you do not have them, get them. If you have them, make sure they are up to date.

There are tools available online to help understand the impact of changes you may be considering. You can visit www.gregdowdall.com/resources/calculators to get started. 


Greg Dowdall CFP®, CIM®, FCSI®, is a Senior Financial Advisor with IPC Securities Corporation in Lindsay. To download a free retirement readiness kit visit www.gregdowdallpresents.com