Home » Financial New Year’s Resolutions You Can Actually Keep
2022 is drawing to an end, and the holidays are almost done. If you’re like the majority of Canadians, you’ll be considering how to make new year’s resolutions that will help you kick off the year on the right foot.
The second most popular new year’s resolution, behind dieting and exercising, is to improve one’s personal finances, according to Statista. Why? Because one of the leading sources of stress is money.
In fact, science concurs. According to a large body of research, one of the most stressful aspects of modern living is debt. This stress can have a negative impact on your health by making it difficult to focus, having trouble sleeping, or changing your life or eating habits (binge drinking, over eating, under eating and much more.)
The time is right to examine your finances carefully as the new year draws near and, if necessary, seek assistance. But it does not even have to be a new year to make a change, you can readjust your finances at any time.
Here are 8 actions you can take in 2023 to better your financial situation. Why not make some of them your new year’s resolutions?
Personal finance doesn’t have to be daunting and difficult to understand. Countless books about financial literacy are available for readers of all knowledge levels. You can feel more secure and at ease managing your money by just educating yourself on the fundamentals. Try a few best-selling books that are simple to read, such as The Wealthy Barber by David Chilton or The Automatic Millionaire by David Bach.
If you consistently run out of money each month, you’re either overspending or your income is insufficient to pay your bills. Finding a second job could be a game-changer if your job doesn’t pay enough.
It’s actually never been simpler to earn a little extra money on the side thanks to the gig economy if you are willing to put the effort in. Renting out a spare room on Airbnb, signing up to drive for Uber, selling unused items on eBay, unworn clothing on Poshmark or providing home or pet sitting services are all profitable ideas worth considering that won’t eat up too much of your time.
The terrible B-word! Most folks hate the concept of a budget as much as they dislike being on a diet, but budgeting is essential to knowing how much money you make and how much money you spend each month. You put yourself in a losing situation if you don’t realize this.
All you need to do is set aside an hour and use one of the many free online budgeting tools and templates available. You do need to be honest with yourself though. Make sure that you include ALL of your expenditures, even if a few are ‘guilty pleasures’.
A budget does not have to be hugely painful to follow either. You can build pleasurable expenses into it (a nice vacation, the occasional meal out, new clothing, your streaming subscriptions) All a budget really does is make sure that you understand where your money goes so that you can make the best possible use of every dollar.
Many people only make the minimum payment on their debt because they believe they don’t have enough money to make a larger monthly payment. You will never be debt-free if you follow this advice, though. Find out how long it will take you to repay a loan using a free online calculator; you’ll probably be surprised by the findings!
Use this as encouragement to pay off high-interest debt as soon as possible. Reduce your expenditure elsewhere if that is what it takes to achieve this. Put any extra money you receive, whether it’s a gift, a tax refund, or money from a side job, toward your debt. Make paying off your debt as quickly as you can a priority and both the present and future will be brighter, at least from a monetary point of view.
Saving money is essential if you want to live well when you retire, just like paying down debt is. Pay yourself first and try to save at least 20% of your monthly income. This means that 20% of each paycheque you receive should be automatically deposited into your savings account to prevent spending.
You won’t be tempted to spend the money if it is gone before you even see it. In addition to helping it grow, putting that money in an account like an RRSP or a TFSA will also make it more difficult for you to access.
The new year presents an opportunity to improve your finances as well as give up smoking, eat less out, and drink less caffeine. Yes, all of these negative habits that you have on a regular basis cost you money.
Calculate how much your daily $2 cup of coffee will ultimately cost you annually. Actually, we’ll do this one for you. If you spend $2 on one coffee per workday for a whole year, but you decide to stop on January 1st and bring your coffee from home instead, you’ll end up with $520 extra in your pocket by the end of 2023.
How many more little sneaky wallet drains lie this can you find and eliminate? Probably more than you think. Reduce just a few expenses and watch your account balance increase.
Checking your credit reports at least once a year is a smart idea. But we mean REALLY check them, as in read everything. Each of the two national credit bureaus, Equifax Canada and TransUnion Canada, will send you a free copy of your credit report if you request one by mail.
By thoroughly checking your credit reports, you can make sure there are no mistakes that can later hinder your ability to borrow money. According to some credit bureau analysts, 10 to 33% of credit reports contain mistakes and just one can seriously impact your financial health.
Most people automatically get at least slightly stressed just thinking about filing their taxes. So much so that they often put off doing so until the last possible minute, rush and make mistakes.
While we know that there are an ever-increasing number of DIY tax software there is a lot to be said for having a tax professional prepare your tax return, whatever your personal financial situation might be.
Not only is letting a pro handle all that tax stuff a lot less stressful, but it will help to ensure that you do not make any mistakes, or leave any money on the table. A tax professional asks a lot of questions that an AI tax prompt never will, the answers to which may decrease the amount of tax you have to pay, prevent troublesome underpayments and yes, maybe boost a refund.
There is also a lot to be said for getting your taxes ‘out of the way’ as soon as possible. Like anything else that seems less than fun but has to be done, the faster you get it ‘over with’ the better.
Ready to file your taxes with the help of a tax professional who will ensure that everything is done with absolute accuracy, and with the best possible results for your 2023 finances? Contact us today and let’s get started!