Do you remember putting your change in a piggy bank?
We would put our allowance, extra pocket change and seldom some paper money we would get as gifts into our favourite piggy banks. Maybe you took the money and bought a new toy or game? Or maybe, just maybe, you put some of it into savings.
Think of our chequing accounts as a piggy bank. Money goes in and money goes out. Of course it will be much more complicated than the good old days but the thinking remains the same. Keep increasing that piggy bank until you do something with the money or get a bigger one.
For 2018 and beyond, there are no greater resolutions than being happy and healthy. But keep in mind that we should do something today that will benefit us in the future. And near the top of that list is making your financial goals a conscious plan this year. Here are some of my favourites…
1. Start Saving “X %” of Your Income.
I read several articles that focus on a fixed 10% amount which is a good standard however the important part is to START NOW! Everyone’s situation is a bit different however regardless of your situation you should strive to find a financials saving system that works for you. Of course, the goal is to increase that percentage over time to make your financial goals turn into reality.
2. Invest Monthly.
How many times have we said “I will do that tomorrow”? When tomorrow comes we have a choice to take action or push it off yet again. One simple way to save is to make your contribution automatic. There is an old saying in business to “Pay Yourself First” and by saving consistently that is exactly what you are doing.
Make it once or twice a month and line it up with a time frame that you can work with. Maybe it is the day after pay day, or when you take your normal draw from the business.
3. Your TFSA.
“How can I pay less tax and make more money?” This is undoubtedly the most asked question I hear and it is a valid one. If you ever had this conversation with me you probably heard me respond by asking “Are you utilizing the Tax Free Savings Account?”
Taking advantage of the TFSA is a must for your 2018 Financial Resolution! You have a significant amount of room to put your money into investments that you do not have to pay tax on…that is one easy way to make more money and pay less tax.
The total contributable room in 2018 is $57,500 and this is increasing $5,500 each year. And you can invest in several types of investments – basic savings, GIC’s, mutual funds, or public stock holdings.
4. Track Your Expenses.
In my opinion the savings component is the easy part, finding more money in your life is a bit tougher. In business you can either increase your revenues or decrease your expenses. Same goes with your personal life…and for today you can start by decreasing those costs!
If you ask yourself “where is my money going?”…well let’s find out! That’s right; Take all your receipts each month, add them up and categorize them. If you commit to this each month you will be surprised how easy this can be over time. We can even help with a simple schedule for you to follow…just ask.
We’re happy to help.
We want you to reach your goals and we can help by suggesting a better path for you or your business. Feel free to share these often forgotten resolutions with someone you know.
Personal tax season is just around the corner so we will be connecting soon.
Mike Brajak
416-936-2667
mike@mbconsulting.ca