Every day we hear about interest rates going up or going down, and read reports about the US dollar in the news. Does the state of the Canadian and the world economy have an effect on our daily lives, or is it something we should just leave to the bankers to figure out?
Set your own financial goals and objectives to see you through regardless world economic conditions. The one thing you can control is how you manage your own financial life.
Whether we save, or spend, what we buy, even where we choose to shop is affected by the state of the economy. The wisest choice is to stay with your financial plan first, and remember the axiom, “pay yourself first,” if you’re able to put even a small amount away in savings. Know what is coming in (be realistic) and stick with your budget. Then you can spend more when more money comes in, or save more when there is less.
Uncertain about what is coming in? Then plan on what you know, with a “blue sky” list of what you’ll add back in when circumstances change.
Know Your Numbers
This is RRSP, RESP and TFSA season. Now is the time to think and look at your financial big picture and take a few simple things to get it in order:
Know Your Books: Have the big picture – know your finance books: what do you currently own, and how much you owe on the house? Savings, investments, RRSPs, tax-free savings accounts, real estate, etc.
Know Your Lifestyle: you enjoy today and, in the future, you hope to enjoy when you are retired. Calculate the number of years before your retirement.
Know Your Cash Flow: Calculate your monthly expenses today and after retirement, add additional costs for travel or hobbies.
Know Your Future Needs: Now you know what you need to put away monthly and annually to stay on your game. Remember, even in a good or bad economy, “pay yourself first” by putting some away either as savings or to pay off debt.
Get Help: It is always best to get professional help with a reputable financial planner once you have gathered some initial numbers and thought about your financial goals. With their knowledge they can help you master your plan, such as payoff your mortgage faster, find proper investments, lower debt, better plan your savings. You may be surprised how much more they know than someone just trying to DIY(do it yourself). Most importantly, they hold you accountable by meeting at least once with you during the year to review progress, answer questions and adjust the plan as things in your life (and the economy) change.