Thoughts and Reasonings | 10 Financial Tips for the New Year

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“It’s not your salary that makes you rich, it’s your spending habits”
— Charles A. Jaffe

The start of a new year is usually when we all evaluate our finances and say that we’re going to do better, that we’re going to make some changes. Sometimes the things that make the most sense are the things we avoid doing.I’ve spoken to a few of my friends and colleagues and got their advice on how they improved their finances, so I’ve complied the tips they’ve given me. Some of these you may agree with some you may not, these are things that they tried and found worked great for them.

We’re not all at the same place financially nor are our priorities and commitments the same. What you spend you’re money on as a single person with no dependants will differ from someone who is married or has children. The bottom line is just to make sure that your finances are healthy, debt is a heavy burden to bear, so we want to do our best to avoid being in that situation.

So here are 10 Financial tips

  • Always operate from a budget. Stick to it and account for everything. This includes your spending money and any other miscellaneous items like feminine hygiene products.
  • Check to see if your company has a pension plan. If they do, you can often have your contribution taken directly from your pay check and added to your plan.
  • Having a credit card is not a bad thing, not knowing how to use it is.
    • If you withdraw cash from your card then you get interest charged daily on the amount you withdrew, the interest is usually higher than what you're charged for on regular transactions.
    • Try to pay off your credit card balance each month
    • If possible make more than the minimum payment required
    • Always make a payment even if it’s just the minimum, this helps you maintain a good credit rating
    • If you have debt on multiple credit cards, choose one card to focus on, pay the minimums on all the other cards and put most of your re-payment money towards the chosen card
  • If RRSP’s confuse you, then start with a TFSA (Tax Free Savings Account - this may just apply to Canadians) To really make them work for you, you need to have some investments tines to it. Access to your account is easier and if you need to withdraw money you won’t pay any fees, hence the tax free savings.
  • Track your money to see where it goes before you start working on your budget. Understanding how you spend your money and what you spend your money on will assist you in making a realistic and practical budget that you will stick to.
  • If you’re pre-approved for a line of credit or an increase on your credit card, take it. You may not need it right now, but it’s better to get it when the bank offers it to you, rather than having to chase them down later when you need it.
  • Invest in a MoneyMart or Mutual Fund, having investments can you help you grow your savings faster (if all goes well)
  • Set up your bank account to automatically contribute to your savings account or other investment accounts. Trust me this helps in the long run
  • Have a line of credit if possible, if you’ve accumulated credit card debt you can use the line of credit to pay them off, the line of credit usually has a much lower interest rate. This also helps you consolidate the payments that you have to make.
  • Don’t impulse buy, think about all purchases especially major ones. Buyer’s remorse is never good.

What financial changes are you making this 2017?