How financial goals can help prevent financial problemsNov 25, 2016
What are your financial goals? These could include paying off debt, saving for retirement, putting money aside for a down payment or an emergency fund. Whatever your financial priorities might be, they become easier to achieve once you set financial goals.
The Financial Consumer Agency of Canada (FCAC) has just launched a new Financial Goal Calculator that can help you set savings and debt repayment goals. The calculator helps you create goals to pay off debt by a certain date, with a certain number of payments, or by entering a regular monthly amount. You can enter all your debts into the calculator, including your current balance, interest rate, payment frequency and the date of your next payment, helping you work toward your financial goal.
Set your savings goals
The FCAC calculator also allows you to set and track savings goals for education, an emergency fund, family event, vacation and more. You can enter your target amount, current balance and interest rate, and adjust your contribution frequency to make payments weekly, monthly, twice a month or every two weeks.
When it comes to saving, you should consider setting realistic goals that are easy to achieve. It’s important not to get carried away and make too many sacrifices in order to reach a savings goal — you’ll want to review your budget to see how much you can afford to put aside each month, while still meeting all regular bills and debt payments.
How an emergency fund can prevent financial problems
While all savings goals are important, we would suggest starting with or prioritizing an emergency fund, if you don’t already have one. It’s best to set three to six months of expenses aside in order to create a financial cushion in case of the unexpected. Again, this wouldn’t mean missing debt payments in order to build savings, but even making a small, regular savings contribution from each paycheque can help you build an emergency fund over time.
As such, it might be a good idea to set up automatic withdrawals from your chequing to your savings account after each paycheque. When a certain amount is moved to savings automatically, you can treat it as another monthly expense; if you adjust your budget accordingly, you might not even notice that the money’s “missing,” so to speak.
Tell us your financial goal and win!
BDO First Call Debt Solutions is currently running a giveaway encouraging you to create financial goals. By using the FCAC Financial Goal Calculator, and sharing your goal with us on Facebook or Twitter, you will be entered to win an Apple MacBook Air Laptop or a 32 GB iPad mini! Check out the full giveaway rules and visit your local BDO Debt Solutions Facebook page or @BDOdebthelp on Twitter to enter by December 16.