It’s the time of year when everyone is making resolutions and promises to themselves about what they want to achieve in 2023. New Year’s resolutions can be great motivators. Unfortunately, it’s also easy to give up on them once you encounter a roadblock or fall short of your goals. If you’re trying to create 2023 financial goals, you want to make sure they are realistic and achievable for you! The most successful financial goals are often the ones that are specific, and made of several small and manageable steps to reduce feeling overwhelmed. Of course, not everyone will have the same goals, but we’ve laid out some of the most common financial resolutions and how to go about achieving them.
Buy a home
If you’re not already a homeowner, buying a home might be on your list of priorities for 2023. After all, housing prices have been declining for several months in most areas, including here in Barrie! If homeownership is one of your 2023 financial goals, it’s time to start planning. Right now, interest rates are at their highest point in years, so borrowing is more expensive. However, it means demand for housing is low, and housing prices themselves are decreasing. Buying a home involves several steps, so the process can easily feel overwhelming. One of the most important things to do is let a mortgage broker assist you. We guide you through everything, from your pre-qualification to your budget and mortgage lending. You can read more detailed information about planning to buy a home here.
Create a rainy day fund
Given the widespread belief that Canada is heading for an economic downturn, many Canadians might want to create, or add to, their emergency savings. This is a smart goal, because as we have learned, life is unpredictable. We can’t always know when an urgent trip to the dentist or vet will pop up, or when we might face layoffs or illness. The bottom line is it’s best to be prepared. You can set up an emergency fund and set aside a certain amount to contribute each month. Earmark this money so you don’t spend it on something else. You don’t have to add huge amounts, because you don’t want to put yourself in debt trying to save up to avoid financial issues! The general recommendation is to have three months’ worth of expenses saved up.
Pay off debts
Many people gather up debt over the holidays, and are left with the task of paying them off once January rolls around. If this sounds like you, you can create a personalized plan to help yourself make those repayments. While debt can feel overwhelming, there are handy methods to combat it, and if you’re a homeowner, you may even be able to use your house to your advantage. If you’re not sure where to start, you can check out this blog (link to GJB-23-01-01) where we discuss dealing with post-holiday debt. This is a great place to begin the process of living debt-free.
Raise credit score
Another common financial goal is to increase your credit score. Our credit scores are important for many financial aspects of our lives, including getting a mortgage, refinancing, or securing extra credit or loans. However, it’s also common for our credit scores to slip beneath our expectations, especially as a result of holiday spending and debt repayments. No matter what your reason for wanting to improve your credit, the path to success is the same. Making repayments on ALL your debts (not just the biggest or high-interest debts), even just the minimum amount, will help build your credit. Reducing your credit usage will also work to your advantage. If you can keep your credit usage around 30 per cent, and make consistent repayments, you will see your credit score gradually increase.
Save up for home renovations
Many people wish to renovate their homes to make it more modern or more personalized to their style. However, home renovations can be pricey projects, and most homeowners need to actively save up for this undertaking. There are a couple of ways to go about this. Homeowners can set up another savings fund and make consistent contributions to it, leading to a gradual sum of money to support renovations. Homeowners might also be able to refinance their mortgage to access home equity and cash flow to help pay for these projects. If you’re considering a refinance, it’s important to contact a mortgage broker to discuss your options first!
Your 2023 financial goals will be personalized to reflect your circumstances. However, they may also overlap with some of these common resolutions. If you have any goals related to homeownership or your mortgage, now is the time to reach out to a mortgage professional to help you get started.
If you have any questions about your mortgage, get in touch with me!