I resolve to be …
New Year's resolutions are like a champagne toast at midnight: Proclaimed
with spirit, bubbling with enthusiasm … and forgotten the next day. This
year, though, if there is one resolution you should make AND KEEP, it's
this: "I resolve to be financially secure."
That may sound like a daunting mission -- but it is vital if you want to
improve your chances to enjoy the best quality of life for yourself and your
family, now and in the future.
A resolution without a plan is about as useful as a car without wheels: a
great gizmo that goes nowhere. So, to get your financial security resolution
in gear and motoring toward success, here are four wheely good ideas
that'll provide excellent wealth-building traction in your daily life:
- Plan for success: Develop a financial plan based on your life
goals, whatever they may be -- from buying a home to enjoying the
retirement of your dreams. Decide how much money you'll need to reach your
goals and the financial steps that will get you there - savings plans,
registered and non-registered investments, and any other wealth enhancing
options that work for your situation. Establish an investment strategy
with a 'risk factor' appropriate to you.
- Budget for success: Now that you know how much money you'll
need to achieve your life goals, a well thought-out budget will keep you
on track. Make a list of all your income sources and a second list of all
your expenses. (A budget filing system is a good idea.) Use your budget to
monitor monthly expenses and keep them in line. Always include an amount
for a regular savings/investment program aimed at achieving your financial
objectives. An emergency fund - usually a minimum of three months' income
- is a good idea, too. Save even when you spend by planning your
expenditures to take advantage of rebates and sales. As an example, make
your long-distance calls during periods when cheaper rates apply. And
minimize your taxes by using all available deductions and credits. The key
is to keep your financial life under control - but don't forget to set
aside some 'mad' money so you can have fun once in a while.
- Contribute to success: Set up a Registered Retirement Savings
Plan (RRSP) and make your maximum contributions each year. An RRSP is the
best tax-sheltered savings-builder for most Canadians - and the earlier
you start, and the more you contribute, the faster and bigger your
retirement nest egg can be expected to grow. And just think of all those
taxes you'll save along the way!
- Defeat debt for success: Develop good spending habits, use debt
wisely and you'll stay on the fast track to financial security. Avoid the
detours of high-cost debt, such as credit cards, by paying these debts off
Achieving financial security is among the best New Year's resolutions you
can make this year or any year. And if you want help developing the right
plan to get you there, talk to a professional financial advisor.
This column, written and published by Investors Group
Financial Services Inc., is presented as a general source of information
only and is not intended as a solicitation to buy or sell investments, nor
is it intended to provide professional advice including, without limitation,
investment, financial, legal, accounting or tax advice.
For more information
on this topic or on any other investment or financial matters, please
contact Eduard Pohlmann .