Four financial tips to plan for a new decade
Happy New Year (and new decade), Condo Life readers. This is always an exciting time – to look back and learn from our mistakes, but also to set some real goals for the year ahead.
We often make New Year’s resolutions to lose weight or work out more, but how about a promise to yourself to build your wealth in a meaningful way? Around this time, I usually talk about making year-long financial goals. But with it being a new decade, let’s take this opportunity to set some long-term goals. What are your financial plans over the next decade? Maybe you have plans to retire, downsize, maybe go back to school or buy a condo. All of these events cost money (lots of it) and take some careful planning to make happen. Start setting your 10-year goals now.
Make a list
Every plan starts with a list. List all the goals you hope to accomplish. Break it up into to two parts – five- and 10- year goals. These could be as straight forward as paying off your student debt or saving a certain amount of money into your RRSP each year. Or they could be loftier, such as buying a property in Florida or take a year off to travel. Write them down, then beside each one attach a price tag. For example, how much will it cost you pay down all your high interest debt if you started now? How much would a world tour for two people over six months cost? This will help plan appropriately.
A friend of mine recently invited me over to make a vision board. Initially, I was very sceptical. How could cutting and pasting images out of magazines help me in my life goals? But this one simple exercise has really changed my life. On my vision board, I have a goal to work out more, spend Sundays with my family and read better books. All of those things are starting to happen in my life. Make a vision board, stick it somewhere you can see it daily. Mine is hanging at the back of my closet up high so I can see it every day, as a reminder of what my goals are.
Motivational speaker Jack Canfield is a big supporter of the power of visualization. He says visualization techniques have been used by successful people to visualize their desired outcomes for ages. “We all have this awesome power, but most of us have never been taught to use it effectively,” he says. “The daily practice of visualizing your dreams as already complete can rapidly accelerate your achievement of those dreams, goals and ambitions.”
Break down your goals
Business writer Bill Hogan wrote the now famous book, How Do You Eat an Elephant? One Bite at a Time! The idea that every big task starts with the first step. This same philosophy can be applied to your financial goals. Break them all down year by year, then month by month, or even week by week or day by day. See how by making incremental moves every day you can reach your big goals. Saving $15 a week, for example, can result in an investment of more than $10,000 after 10 years. Go ahead and make big goals, but break them down into smaller moments to make them feel more attainable.
Seek professional advice
You don’t have to pay thousands of dollars to get good financial advice. You can contact a fee-only financial planner who can help you set your financial goals. They will look at your financial situation, talk about your goals and draw out a plan to get you there. They are unlike investment advisors who buy and sell investment products, often for a fee. If you want to become more tax-efficient, consider hiring a tax accountant. They cannot only help you with your taxes now, but also make a plan for you to be more tax-efficient in the future.
Lastly, make a plan to revisit your goals at least once a year. Now that you know where you want to be, make sure you’re staying on track. Hopefully, when you ring in 2030 you will feel like you have accomplished the financial goals you set out today.
Rubina Ahmed-Haq is a journalist and personal finance expert. She is HPG’s Finance Editor. She regularly appears on CBC Radio and TV. She is a contributor on CTV Your Morning and Global Toronto. She has a BA from York University, received her post graduate journalism diploma from Humber College and has completed the CSC.
Follow her on Twitter @alwayssavemoney.