3 simple financial resolutions you need to start

3 simple financial resolutions

Happy New year everyone!  

I hope 2016 was better to you than the media portrayed it to be. For the last few months of the year you’d swear nothing good happened. I think those people just didn’t have time to look at their retirement savings. The year was pretty solid overall for the markets, the Dow Jones was up 14.4% as of closing just before Christmas.

3 simple financial resolutions you need to start

Very solid year for the Dow Jones

For Canadians, the TSX composite index was up 17.8% over the same time period! So, if your investments are close or matching these indexes you’re looking at a possible 14-18% return for one year.  To put that into perspective you’ll double your portfolio in 5 years without any additional contributions!

3 simple financial resolutions you need to start

The Toronto Stock Exchange had a great year as well!

But do you think this momentum will keep going that long?

Unfortunately, no. I can’t see this type of growth being maintained for 5+ years without a huge correction in the markets. It’s just hard to believe companies would be able to sustain this growth. Although I am certainly hoping the growth will continue on a steady pace. If some of you need a few better ways to increase your savings other than wishful thinking, keep reading!

3 simple financial resolutions you need to start

Financial resolution #1 – Pay your debts

Prioritize your debts this year. Debts come with interest. Interest costs your more money the longer it takes to pay down the debt.  Some debts can be pretty low at only a 1-5% interest, this is probably a mortgage or car payment. The debts you want to focus on are the high interest rates. Credit card debt is almost always in the double digits. Sometimes credit cards can charge over 20% interest. This can bury you quickly. Pay it off once all of your necessities are pay for(shelter, heat and food).

If you’re spending money on things that aren’t this debt you’re wasting your time and money. Your time is wasted because now you have to work more due to the interest. Your money is wasted because the interest. Do you see the pattern? DEBT = BAD

Financial resolution #2 – Eliminate or reduce a payment

Do you buy lunch at work? Start bringing a lunch. Do you buy coffee before work each morning? Buy a travel mug and brew it at home for a fraction of the price. Do you pay a membership to go to the gym to only jog on a treadmill? Jog outside. Each of these things could be a small amount each day or month, but they can easily add up to hundreds and thousands each year.

Maybe you’re already financially disciplined and the above ideas don’t apply to you? Well have you tried reducing your current bills? Call up your cell phone provider and ask to speak to their retention department to see if you can lower your bill $5/month. It happens, I do it every time my provider calls to try to upgrade my phone. I’ve gotten it lowered twice. They stopped calling.

Another great idea people don’t seem to realize for your cell phone is if you’re over your term contract you now own that phone. Call your provider and they can drop $20/month off your bill immediately.  Almost every cell phone provider in Canada subsidizes the price of the phones with an extra $20/month when you buy thru them but none will tell you after that term that you can pay less.

Financial resolution #3 – Control your impulses

There’s tons of ways to try to do this. I’ll just list a few that I’ve heard but if you know more please let us all know in the comments below!

    • Don’t go grocery shopping when hungry – Some say we’re more likely to purchase more food when we get groceries hungry.
    • Make a list – This applies to goods and groceries. Make a list for what you’re going to get and stick to it.
    • Don’t shop for entertainment – Find something cheaper to entertain your time. The more you think about spending money the more likely you will. IF you’re going to look at anything, look for coupons for your necessities. That way you’ll save money when you do need to spend your money.
    • Calculate the items “time value” – When you’re looking at buying something think about how many hours or days it will take for you to earn it at work.  Is that worth your time? Try to work those hours first and see if you still want it.
    • Impose a 24-hour rule – If you’re looking at buying something wait 24 hours to see if you still think you want/need it. Chances are you’ll be thinking about something else and forget all about that super cool thingamajig or whatchamacallit.

Hopefully these 3 quick financial resolutions will help you start your 2017 off to a great year! Keep disciplined with your savings and keep moving towards your financial goals.

 

5 comments

  • Great resolutions Stephen! One thing I would add, especially for your second suggestion, would be to look back at the past year on where you spent the bulk of your money. You need to find out where you’re spending your money to make the necessary changes. My fiancee and I did this, and we were spending more than $1000 every month on groceries, eating out and booze. We hope to do better in 2017. All the best this year!

    • Definitely a great point! You’ll definitely want to look where you’re spending all your money to see where you can cut down to meet your future goals. Booze and eating out is definitely one of my biggest wastes too. New years alone was close to $300 for a nice meal for two and some drinks. Luckily we’ve decided to cut back until Valentine’s day. No booze, no eating for 6 weeks.
      Stephen recently posted…3 simple financial resolutions you need to startMy Profile

  • Happy New Year Stephen, excellent resolutions!

    I cleared my credit card debt late last year and have hidden the card away so I don’t have access to it unless I have an emergency.

    One of my focuses for 2017 is similar to your resolution #3.

    I keep my finances divided across two accounts, the bulk in a savings account that isn’t easy for me to access. I keep the funds available on one card low so that I have to consciously think about the purchase I am about to make and whether it will fit into my financial planning.

    Best wishes for 2017.

  • One thing that I do is keep track of all my spending down to the last penny. Then every couple of months I analyze it and see where I am doing well and where I need to get better with. Doing this helps me to cut back and save money. Great information, thanks for sharing!

  • Yes, it almost covers every aspects about how to save money. Debts are our enemies if we want to save some money because of high interest. Some of my friends bought cars by loans. They have to pay interest every month. Then they applied loans for houses again. Every month, they pay interest with their salary after buying necessities.

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