Resolutions. You might’ve made some for this year to improve certain aspects of your life, whether personal, professional, or both. It’s an equally good idea to make some resolutions as well to make the most of your money. Your financial well-being is just as important as your physical and mental health and your career.
Below you will find 5 realistic money management ideas that are easy to implement and stick to, and can have transformative effects on your financial well-being.
1. Be intentional. Set goals and deadlines.
Goals are what motivate us to push forward. Without motivation or a sense of direction, you may never achieve what truly matters to you. By setting financial goals, you can lead the life that you want.
When it comes to financial goals, it’s not only critical to write them down. Writing them down is only part of the recipe for success. You must also be clear and concise. When your goals are vague, you’ll have trouble achieving them. Therefore, it’s important to set a timeframe and deadline for each of your financial goals.
It’s equally important to ensure your goals are measurable. This allows you to track your progress, adjust your efforts, and know when you can celebrate your success. Always include a tangible number in your goal. You can then work backwards and determine how long it will take you to achieve this goal. Conquer one step at a time, be patient, and remain committed. Keep in mind that nothing happens overnight.
2. Put your finances and savings on autopilot.
Banking has become a lot easier because of new technologies. You can now receive deposits, pay your bills, grow your savings, and apply for loans at the click of a cursor or the touch of a finger. Digital banking is so popular that more than 76% of Canadians use digital channels, both mobile and online, to manage their finances.
One neat feature of digital banking solutions is that you can automate your personal finances according to your needs and goals. This means you don’t have to worry about your paycheck getting lost in the mail, missing regular bill payments, or misplacing financial documents.
Automating your finances doesn’t only help relieve stress and avoid late penalties. It can also help you get out of debt quicker and build wealth over time. By automatically making payments on your debt or contributing money to your savings, investment, or retirement accounts, you can reduce your debt and make your money work for you.
3. Create or update your will.
You may think only the rich and wealthy need wills. Or you may be worried that the cost won’t be worthwhile. You may simply avoid creating a will altogether because the subject itself can be uncomfortable to think or talk about. Whatever the reason, you should know that a will represents an essential part of a sound financial plan, and every adult should have one.
A will doesn’t just cover how your hard-earned money will be distributed when the inevitable occurs. A will also enables you to maximize your estate’s benefits and control your legacy. Perhaps most importantly, you can also help ease the burden on your loved ones during an exceptionally difficult time.
More than half of Canadians don’t have a will and millions don’t have a will that is up-to-date. Are you among them? If the answer is yes, it’s time to start writing, or at the very least, brainstorming.
4. Make it a habit to pay yourself.
What does “pay yourself” mean? It depends on your life stage and circumstances. If you’re an employee, it’s about setting money aside before paying your bills. If you’re a business owner, it may be rewarding your family for all the hard work, trials, and tribulations throughout the year, such as with a vacation.
“Successful savers take it off the top of their paycheques, invest it and let the chips fall where they may,” said David Chilton, the author of The Wealthy Barber, in an interview.
The general idea is to work your way towards financial freedom by prioritizing yourself. Saving is not necessarily an intuitive habit, but the more and more you do it, the easier it becomes. And you can even automate it, as in Point 2.
5. Invest in companies that reflect your values.
There are many ways you can use your money to contribute to bettering the world around you. One of the most popular ways is by donating to charities, which you can receive tax credits for.
Another way you can help is by investing in companies that are committed to social good and creating positive change. Contrary to popular opinion, you can earn competitive returns and invest for the social good without sacrificing one for the other. Franklin Templeton confirms that ESG investing “doesn’t require a trade-off in terms of performance.”
