While many follow the same goals every year, others don’t have any goals set it in place. There no such thing as the right or wrong timing with regards to self-improvement. If you feel ready to step up your game, there’s no better time than the present. We would like to share 3 financial goals to freshen up the strategy this 2021. Keep in mind that some of these goals might not match everyone’s goals and the list of goals can be extended to other financial fields of interest.
Goal 1: Commit to a budget
The very first thing and the foundation of financial success is committing to a budget. A budget helps you understand where your money is going and what is spent on. A budget can be done in different ways such as on paper, computer sheets, or beneficiating of today’s technology that brings budgeting tools right in our phone.
Why a budget? Budgeting can help cut costs on unimportant things, giving you the chance to put that money towards a bigger purchase or in your emergency fund. If you don’t have a budget already and are looking to improve your finances, it’s time that you start one now.
Goal 2: Build an emergency fund
Another goal to add to your list this year. According to the Government of Canada, “two-thirds of Canadians (64%) have an emergency fund sufficient to cover 3 months’ worth of expenses. A similar share (65%) are confident that they could come up with $2,000 if needed in the next month.” as of June 2020.
Why an emergency fund? An emergency fund can help avoid using credit cards for unexpected expenses, illness, job loss, or other rainy days. It’s ideal to have a couple of months of expenses covered in your emergency fund in case of loss of income or a major emergency.
Goal 3: Plan to eliminate your debt
Paying off debt is another habit to get into in 2021. Debt is one of the things that affect us in one way or another. It becomes stressful when you can’t pay the bills on time and interest is starting to add up. Debt also affects the credit score which is one of the most important factors when it comes to getting a loan, increasing credit card limit, or applying for a mortgage. Depending on the amount of money you owe, you might need more than a year to pay it all off. No matter the sum, you must have a plan in place.
Why pay off debt? Making a habit of spending less and making extra payments towards becoming debt-free help release the stress and not only. Paying off debt fully and not carrying an amount from month to month eliminates the interest that would usually accumulate on the amount owed. Lastly, being debt-free give you the opportunity to put a bigger amount towards your savings account or towards a big purchase.
We offer professional advice and proficient financial tools as well as a well put together plan for our clients to ensure the debt is being paid.