Cyndy Batchelor, Financial Advisor
O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd.
A New Year brings new goals and plans that we hope to accomplish. Having been through two hard years of living in a Pandemic with many of us experiencing cutbacks at work, we are all feeling the pain of rising prices at the grocery store and at the gas pumps. Here are a few tips to help you stay financially on track in 2022.
First and foremost, make a budget. This means writing out your incomes and expenses and knowing exactly what you spend where. If you are overspending, determine what can be cut out of your budget (needs versus wants and eliminating expensive vices).
Credit Cards – if you use them then pay them off each month. The high interest rates will eat up a significant portion of your monthly budget.
The “Don’t pay until 2023” trap– don’t do it, there are immediate fees and interest payments that start accumulating if you don’t pay - if you can’t afford it today, you probably can’t afford it in the future. Try local marketplace sites for gently used items. You would be surprised what you can acquire for a much lower cost (or even for free).
Set aside money for emergencies. Take $100/pay and set it aside in a savings account you don’t touch except for real emergencies. A real emergency is not dinner out or regular bills – it is losing your job, a roof collapsing, or someone in your family getting sick. It is important to be strict with yourself. If you cannot afford dinner out – don’t dine out.
Coffee and Tea. $4 a day adds up to $20 a week adds up to over $1000 a year. If you save this instead of spending it, you are already ahead. Invest in a good travel mug and bring your own instead of making the stop at Tim’s or Starbucks.
Involve your family – if you have kids who compete in sports or activities involve them in your budget planning. Maybe they want to stop for takeout after a game. If they are more involved, they can make better choices when asking for phone upgrades, new shoes, and those pit stops on the way home from a game.
Savings first. 10-20% of your income should be set aside for your future. The future isn’t next week or next year, this is your retirement. If you have a government pension then this is being done for you automatically – otherwise, no one else is saving up for your retirement except you.
Ensure you treat yourself occasionally. Life should not be all about being frugal. Make sure to set aside something in your budget for fun or splurging occasionally. It is always good to have some fun too.
Speak with a financial advisor about wealth planning and budgeting tools that are available to you today. We welcome questions so please reach out!