Have you started thinking about any New Year’s resolutions? If not, you might want to consider creating some resolutions for your finances! Successful financial management is more important than ever, and it doesn’t have to be overwhelming. You can start by adding in some achievable goals that will get 2024 moving along on the right path. Here are five of our recommendations!
#1 Create a monthly budget
A budget is one of the most basic and important parts of maintaining your finances. A proper budget helps you determine how much you can afford to spend, and where you should save. While many people have a budget, it’s easy to inaccurately calculate an appropriate one. This means your budget might not be meeting your needs at all. We recommend starting with a clean slate in the new year, so you can be sure your budget supports your finances. Consider your income, expenses, debts, and credit. Do your best to form a budget that you think represents your situation. You can always adjust your budget as needed. It can take a lot of trial and error to hit the sweet spot! Go easy on yourself as you work through this task, and don’t feel bad if you go over your budget in the beginning. When it comes to resolutions for your finances, practice makes perfect.
#2 Contribute to an emergency fund
An emergency savings account is essential. No matter how well you budget, there will always be unexpected expenses that pop up. These can be stressful, and you are likely to feel even more panicked if you aren’t sure you can afford them. Having the safety of an emergency fund ensures that you can support the costs of these events. For example, your dog might need a sudden operation, or a child might need a pricey dental procedure. These are items you’re probably not actively budgeting for in your everyday life. You can start building your savings account by contributing small amounts each month. You don’t need to pour hundreds of dollars in at a time. Plus, you shouldn’t feel like you’re stretching yourself too thin! Over time, small contributions will add up.
#3 Try out a finance app
There are tons of budgeting and finance apps you can test out to see if you’re into mobile money management. Many apps are designed for beginners, so they are not overwhelming to navigate. Users can often sync up their bank accounts with the app to track their spending and remind them of payment due dates. Some apps allow you to split your money into various spending categories so you can keep a detailed record of where you are spending the most. You can also explore investment apps if you want to try some simple investing opportunities. You can read about some of our top app recommendations here.
#4 Keep up with financial news
Another great way to help manage your money is to stay updated with financial news in Canada. You don’t need to become an expert, but it’s handy to learn some basics. For example, understanding Bank of Canada interest rate announcements will help you learn how the economy is operating and what it might mean for your mortgage or finances. Many news sites like CBC and Global News have a finance section where you can explore some big headlines. You can also look at dedicated financial publications like MoneySense for more detailed news. Having a general idea of Canadian finances is an easy and useful resolution for the year.
#5 Reduce your credit use
While this is easier said than done, limiting your credit usage can have a big impact on your finances. Using credit feels great until the bills come in, and you realize how much money you owe. When you are not immediately spending out of your account, it’s very easy to blow your budget. Now, you don’t have to put your credit card in the freezer or cut it up. Odds are you will still need it for certain necessary expenses. However, you should avoid getting new credit, and try to reduce the use of your current credit if possible. Before you make a purchase, ask yourself whether you would still pay for the item if you only had your debit card on hand. If the answer is no, this is a good indicator you should resist the urge to spend.
Creating realistic resolutions for your finances can be tricky at first, but you’ll get the hang of it! It’s important to be patient with yourself as you work through your personal finances, and what strategies work best for you. If you are hoping to purchase a home as a financial goal in 2024, you should also get in contact with a mortgage broker! We can discuss next steps and put you on the right path towards homeownership.
If you have any questions about your mortgage, get in touch with me!