– by Viola Van de Ruyt, VandeRuyt Wealth Management Group –
The New Year always brings lots of resolutions and a big one for many folks is getting on track financially. This may mean paying off debt from the holidays or, for many, the bigger picture of getting ready for retirement.
In fact, polls indicate that the top three financial concerns among Canadians age 20 to 60 are paying down debt, retirement planning and managing day-to-day spending. The reality is that all three are closely connected. Planning for the time when you no longer have a pay cheque requires careful consideration of your cash flow needs and ideally planning for being debt free.
Here are some tips to help you get on track in 2016:
• Review the interest rates you are paying on debt.
• Add up what you are paying in interest each month if you’re not paying it off.
• Look at when you can realistically have it paid off and make this date a priority.
• Ask yourself – what would happen if I was forced to retire early?
• Review what you purchased last year and use your mistakes to guide this year’s purchases. Ask yourself: “Will I be really happy a year from now that I bought this or will it not even matter, or worse might I regret it?”
• Automate your savings for retirement like a bill payment every month; don’t wait to see what’s left.
• Consider longevity in your retirement plans. It is a lot better to keep working an extra couple of years in your 50s or 60s than to need extra income when you are in your 70s or 80s.
Words of wisdom from the past that still make sense today:
• Pay yourself first.
• Don’t carry credit card debt.
• Have an emergency fund.
• Don’t put all your eggs in one basket.
Plan your cash flow.
A cash flow plan will help you with getting on track to pay off debt and be ready for retirement. You will need to separate your monthly spending into two categories. First is what you have to spend to survive and keep a roof over your head and then the second is everything else. Even grocery shopping becomes discretionary when you are making choices in a store that sells items ranging from cosmetics to lawn ornaments.
These day-to-day spending decisions don’t necessarily mean you give up everything you love: it’s about making informed choices with a goal in mind. As in all aspects of modern life, we need to be more mindful and conscious in our decision making.
By taking a mindful approach this can be the year that you keep your New Year’s resolution!
Viola is an Investment Advisor with National Bank Financial Wealth Management in Sidney. The opinions expressed here are not necessarily those of National Bank Financial. All information comes from sources believed to be reliable but its accuracy cannot be guaranteed. Please consult your investment advisor to obtain complete information, including the main risk factors. National Bank Financial is an indirect wholly-owned subsidiary of National Bank of Canada which is a public company listed on the Toronto Stock Exchange (NA:TSX). National Bank Financial is a member of the Canadian Investor Protection Fund. To reach Viola please visit her website www.violavanderuyt.ca.
