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What is the most urgent financial resolution for YOU?

on Tue, 01/05/2016 - 04:19

While the new year just rolled around, most of us would have thought of a "new year resolution". Regardless what is your resolution, improve your finances should be a part of it. Improve - there is always room for improvement :)

No matter where you are financially, you should start/continue to save in TFSAs, since our Liberal government had rolled back our 2016 TFSA contribution room, if you were 19 in 2009 (and had done absolutely nothing on it), you would have accumulated $46,500 TFSA contribution room by now. Bear in mind any growth within a TFSA is non-taxable, with the power of compounding, it could be a substantial amount down the road. 

Especially for seniors, or anyone who already has a huge RRSP portfolio, it is even more important to start making use of your TFSA. See further reasons at The losing party of Liberals' decrease on TFSA contribution.

For those who "can never save", try put away $25 per pay cheque or whenever you get paid to start and slowly increase the amount base on your comfort level/income level. Always remember to pay yourself first and that is the only way to be able to save for yourself. 

For those who are in debts (especially who carry balances on credit cards), try to pay 5% more than your normal payment every month. 5% may not be a whole lot but it is already a step forward from the original amount you had been paying. Increase to whatever you can afford to and try to pay them off eventually. 

People had always have the question of: what to pay down first if I have more than one debt?

The answer is always: the debt with the highest interest cost. There is one exception though... if you have some relatively small accounts, then paying off the smaller accounts first might work better for you (and give you motivation because you had "paid OFF" something). Then apply the payments to those accounts to the next "small" account or to the highest interest account. This is not easy but it works!

For those who are already saving, congratulations! Keep up the good work and start exploring new investment strategies! 

For those who are high income earners, you might still have cashflow problems (as you do have lots to take care of), try to start saving as indicated above and put together a budget. You should also look into some tax strategies (other than contributing into RRSP, see why you should to stop maxing out your RRSP contribution) to try lower your tax liability. 

For people who have lower income, try start to work on something small that will be able to get you some changes. Maybe you can make some extra cash or you will learn some new skills to advance yourself.

For those who have some extra time in your hands, please go out there and do some volunteer work! That might not improve your financial situation but I am sure you will find it very meaningful. You might even meet some new friends. 

For those whose health is not in your best shape, please try make some little changes and improvements will for sure be gradually achieve. 

No matter where you stand and what you decide to do, I wish you success in 2016! Happy New Year!

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