Are you aiming to make better life choices? If so, you’re in good company. A recent survey found 3 in 10 Canadians intended to make New Year’s resolutions.
What are people hoping to get better at? ‘Exercise more’ was the most popular answer among those surveyed (51%). Other top answers included:
- Saving money (49%)
- Eating healthier (48%)
- Losing weight (42%)
- Reducing stress (35%), and
- Sticking to a budget (33%).
Tempted to put those financial resolutions on top of your list? The good news is that adopting some of these better habits might have unintended positive consequences. Did you know that being more mindful of your budget can reduce stress? It’s true.
Making smart money moves is easier than you think
Resist the urge to implement all of these on January 1. Slow and steady wins the race, as the saying goes. Some are quick wins you can do today. Others need more planning. These money moves will help set yourself up for a brighter financial future.
- Make a budget. Don’t have one? Try our Budget calculator to get an idea of your monthly expenses. Or update the one you’ve already got. Make sure it’s realistic. Don’t forget emergency expenses like car repairs and yearly expenses like property taxes or winter clothes for the family. Then stick to your budget as best you can.
- Pay yourself first. It’s one of the most important rules of personal finance. What does it mean to pay yourself first? It means putting aside an affordable amount every month before you pay bills or make any other purchases. Make it an automatic deduction so that you never see the money and aren’t tempted to spend it.
- Build an emergency fund. The pandemic taught many Canadians about the importance of saving for a rainy day. How much should you have saved up? Aim for 3-6 months of your net income. What matters most is that you start saving today. Even a small amount every paycheque can go a long way. Putting that money into a tax-free savings account (TFSA) might make withdrawals less tempting.
- Maximize your employee benefits. This includes both retirement savings and health benefit plans. Call the company that administers these plans and ask about how to get the most out of your plan. For example, a lot of employers match the retirement plan contributions that employees make, up to a certain level. It’s free money that you don’t want to leave on the table.
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5. Buy something you need right now. That winter coat you’ve been putting off buying? Take advantage of ‘end of season’ sales. Chances are, it’s priced to go.
6. Meet with a financial advisor. Or find an advisor if you don’t have one. A Sun Life advisor can help you build a personalized plan to make your life dreams a reality.
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7. Prepare your will. Or update the one you’ve already got. Thinking about your will might not sound like anyone’s idea of fun. But you’ll sleep better knowing your wishes are clear. Make this the year you don’t put off your Estate planning.
8. Don't do your own taxes. For most people, hiring a chartered accountant to file your income taxes will save more than it costs.
9. Read (or watch!) as much as you can about finances. Financial literacy is the gift that keeps on giving. Becoming familiar with financial terms and concepts may help you be more mindful of your money. Want to increase your financial literacy? Get started with our Simply Put video series. It’s all about explaining insurance, savings and investment terms – simply.
10. Teach your kids about money. Share with them why money is important and how to respect it.
11. Save (roughly) $50 a week by brown-bagging your lunch. You might have picked up the habit during lockdown. Keep it up and grow your savings.
12. Review your insurance coverage. Your needs and those of your family will change over time. Talk to your advisor about the types and amount of protection you have. Don’t forget to update named beneficiaries if your situation changes, like after divorce.
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13. Write down your short-term financial priorities. Think about what you’d like to accomplish by the end of the decade. Choose goals that are attainable, but optimistic. Studies show optimists have a better relationship with money than pessimists.
14. Write down your long-term financial priorities. Here’s where you can dream of life goals, and retirement. An advisor can help you update your financial roadmap to get you there.
15. Calculate your net worth. Just add up your assets (what you own) and your debts (what you owe). Then subtract your debts from your assets. It can be an eye-opening experience.
16. Check your credit score. You can access your credit score through your bank or through a credit bureau. It’s free and doesn’t take more than a few minutes. Why take a peek at your credit score once a year? A good credit score may make the difference when applying for a new job, getting an apartment or a new mortgage.
17. Sit down and talk over your finances with your partner. This is especially important if one of you usually takes the lead on the family finances. It pays to have a good sense of what your financial situation is at all times. And especially important when one of you passes.
18. Get a library card. And then refer back to tip #10.
19. Subscribe to the Brighter Life newsletter. Get money and health advice in your inbox every month.
20. Rebalance your portfolio. What does that mean? It’s the portion of your money invested in stocks, bonds and other assets. You’ll want to reset this asset allocation as you age and as the markets go up and down. Talk to your advisor about a plan that follows your changing needs.
This article is meant to provide general information only. Sun Life Assurance Company of Canada does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.