Financial Goal Setting and Budgeting Solutions

Steps to Financial Success

1.  Prioritize

We have three financial buckets to fill…….

  1. Pay for yesterday’s mistakes. Yes, we all make them. Not paying for it will not make them go away.
  2. Think of tomorrow. Start saving. The sooner you do it – the better. None of us is insured to what tomorrow will bring, so don’t underestimate the need for have something on the side.
  3. My favourite one – Live for Today!  Work will never end. It will be here even after you are gone.  Maximize on what you can have – today!

2.  Get a pen and paper, write it down…. Budgeting is not to be taken lightly.

Have a written plan that will merge your life priorities with your financial resources.  Most people have no plan at all.  We also know there is a big difference for most of us in what we “should” be doing and what we actually “can” do.  After examining your whole financial picture, it is then important to make the most of every dollar and allocate them to best fit your prioritized buckets, whether it is debt repayment, RESP, TFSA or RRSP or combination of all the above.

3. Consolidate

Consolidate liabilities with a specialist who has access to a wide range of lenders and products to ensure you have the best rates and products for your personal needs.

4. Consolidate some more

Consolidate your income-producing assets (investments).  The objective of consolidation is to coordinate and simplify.  This is not to be confused with keeping all your eggs in one basket that falls under the role of diversification.  Consolidation has many benefits including; better planning, less confusion, more control over income flows, more efficient asset allocation, tax planning, fewer statements, simpler administration and cost savings.  You cannot have the best possible results if you have assets scattered about with different advisors and institutions.  Conflicting advice is inherent in such a situation which results in a stressful and counter-productive plan.

5.  Protecting what you have means respecting your own hard work

Review your insurance needs and plans with an insurance specialist.  Creditor insurance is the least efficient and generally the most expensive form of protection.  Many times we have mortgage insurance, line of credit insurance, and loan insurance just to name a few.  Do your homework and find a specialist you can trust who has access to a wide range of financial tools and products, to provide better coverage, save your money, and simplify your life.

6.  This is an important one! Get close and personal with Revenue Canada

Know your taxes…..income taxes that is.  During the savings years, it is important to maximize all tax credits available and to have your savings within proper plan, whether that means a spousal RRSP, Individual RRSP, or TFSA.   When it comes time to use those savings for retirement income, often people are losing entitlements needlessly and face double taxation to have the Age Credit and OAS clawed back.  Avoid unnecessary loss by knowing your tax bracket range, tax credits available and all government benefits available to you and your family, now and in the future.  Once again, a specialist can review your taxes to ensure you are maximizing benefits and minimizing taxes.

7.  Take a look at the full picture

Know your retirement benefits.  If applicable, review your employer pension plans to ensure you have maximized your contributions.  In some situations, there may be room to “buy back” benefits and if there is, bump that up in the list of priorities ASAP.

8.  Be one step ahead of the game

Prepare now for the later years of retirement with creative tools, planning, and investing.  This will provide you with greater freedom and discretion as to how you use your money to do the things you want to do in the earlier years of retirement.  Layer your different sources of income in the most-efficient manner, not only for today, but for future years as well.  Which assets and sources of income should you use first, and in what order? Which assets should you defer?  Have a process for investing your income-producing assets and creating the cash flow you need.

There is no substitution for teaming with specialists to construct your own personal plan.  The skills and attributes that are required in aiding you in accumulating your financial assets, minimizing your liabilities and expenses, and devising an effective income plan, are very different from those required of the bankers at your financial institution.   By working with a team of independent specialist you can be assured that there are no proprietary products mandated to be sold, no product of the month pitched, and definitely no “fries with that” mentality that benefit the institutions rather than the client.