Tips for keeping your New Year’s investing resolution
About 80 percent of New Year’s resolutions fail by mid-February. But you’ve been there, done that. You made a resolution to invest better in 2018. Now you’re going to make it happen. We have a few tips on how you can stay on track.
Budget and set aside money for rainy days
You don’t need a lot of money to invest. That’s a myth. Anyone can invest, no matter how much money they have. You just need to do some budgeting first.
Add up your income from all sources (maybe you’ve got a full-time job, but do paid gigs on the side from time to time). Set aside budget for how much you want to save. With this back-of-the-napkin calculation, you can see how much you have left for investing. If DIY budgeting is not your thing, check out money managing software like Mint.
Before you invest in individual portfolios, you might want to save enough in a high interest savings account to cover emergency fund and basic living expenses for a rainy day fund. Depending on your circumstances, you actually might not need it – but it’s worth investigating before you invest.
After that, you can grow your money even more by investing. The earlier you start, the better!
Review your financial plan, or start one
Sixty-five percent of polled Canadians don’t have a financial plan, according to BNN. No plan means no action.
If you have a detailed plan, now is a good time to review it. See if you are on track with your goals. If not, it’s never too late to start one.
How detailed should a financial plan be? One size does not fit all. Working with a financial advisor who tailors to your specific needs and goals is the key. Our advisors take a look at your current financial situation. Plan for the future in a free financial planning session.
Know your credit score and review your credit report
A healthy credit score is a must-have. It’s what lenders use to determine your risk level as a customer. Going beyond the numeric score, however, is a detailed report. The report contains the summary of your credit history, which will give you a bigger picture of your financial health compared to the score.
Don’t just invest money. Invest time as well
Keeping up with timely and accurate information requires work. You might have to put in some time to investigate.
For instance, you could take a look at our overview of the differences between a TFSA and RRSP. See why it might be a good idea to take out CPP earlier than later. Check out the pitfalls of borrowing to invest (tsk, tsk, Canadians). Learn what it really takes to retire in Canada. We’ve got a mini-encyclopedia of investing right here for you to click through.
Plan early and take action for RRSP season
If there is one thing finance fanatics do more than the average person, it’s planning and getting a head start on the important things. Not long into the new year, there is an important deadline coming up. Yes, we’re talking about the RRSP contribution deadline. Fortunately, March 1, 2018 is still a while away and there is time for those who aren’t such keeners to get going.
Don’t wait until you’re close to the deadline. Figure out how much to contribute. You can start crunching the numbers now. The earlier you do it, the more time you have for unforeseen circumstances (that you don’t want when it comes to finance).
Exercise self-discipline and you will improve your financial well-being in no time. That New Year’s resolution of investing better is getting a check mark beside it!