January 4, 2024
Looking for ways to improve your financial plans? We look at how to achieve some common financial goals like budgeting, saving and paying off debt here.
Many of us set a New Year's resolution to get better at managing money. It’s a good one to have during an affordability crisis.
Everyone will have different financial planning goals. For some, it will mean cutting back on spending; for others, it will mean tackling credit card debt.
We’re not only going to look at common financial goals for the new year but also how to achieve them.
New Year’s resolutions are hard to keep. Many often give up by the spring. But when it’s your money, there’s an added incentive to stick to it. There are many ways to help you stay on track and not lose sight of the endgame.
The key with any goal is to make it achievable, and what’s achievable depends on your situation.
That means making your goal specific to you. If you want to pay off debt, specify how much debt you want to remove. Set a target you believe you can reach.
Want to save money? Again, ask yourself exactly how much money you want to save. Make it a reasonable number you can work towards.
If you want to create a budget, set a goal of saving receipts or looking at your banking app daily to track your expenses better.
The little things add up.
Did you know people who write down their goals are more likely to achieve them than those who don’t? Seriously, it’s true!
A study on goal setting at Dominican University in California found you are 42% more likely to achieve your goals just by writing them down.
Writing it down helps commit the goal to memory better. It also motivates you to act if you put it somewhere you see it every day, such as on the fridge.
Writing it down can also help you create a plan to achieve the goal.
It’s great to have a goal written down, but it means nothing without a deadline.
‘I will cut my weekly spending by $75’ lacks a timeline to complete it.
‘I will cut my weekly spending by $75 by the end of next month’ is a goal that you can work towards with a self-imposed deadline to find savings and cut spending. It makes you accountable to yourself.
Once your goal has a time frame, it’s time to achieve it.
What someone’s financial goal is will depend on their own situation. Here’s some of the most common goals people set and our tips for achieving them.
We know budgeting can be hard. It can be very overwhelming to even know where to start, especially with so many different budgets to choose from.
Budgeting really just means tracking your spending. With most purchases now being made with credit or debit cards, it’s easier than ever.
For the simplest budget, all you need to do is check your purchase history through your banking or credit card app and add up the cost.
Subtract that from your paycheque and you’ll be able to see if you’re spending too much, saving enough, and where to cut back.
You can use our budget planning tool here for a more in-depth way to track spending.
For those who would prefer an app to track their spending, there’s lots of options.
Wallet: Money & Budget Planner, Pocketsmith and YNAB are all examples of apps to help you track your spending.
Want AI to help you budget? There’s Wally, the world’s first AI finance app.
Keep in mind that many of these apps require you to pay per month to unlock all the features.
Remember, budgets evolve. Rarely will you spend the exact same amount every month. You need to make allowances for that and for the unforeseen which, leads to our next goal.
Saving money is something we all want to do. Figuring out how is the challenge. It works best to have a concrete amount you want to save.
One of the easiest ways to start is to set up an automatic transfer to your savings account, then you don’t even have to think about it. You simply assign a certain amount of money to be moved to your savings each month. You can do this through your bank.
Another thing is to check all your subscriptions. There’s likely one you don’t use much and can live without, cutting it will mean automatic savings.
While you’re doing that, also think about your phone and internet bills. There’s probably a deal out there that would save you money.
Your current provider may even offer you lower prices if you tell them you’re thinking about switching.
Of course, we should talk about how to save money on food as well.
Flipp is an app that allows you to browse flyers ahead of your next grocery shop, so you’ll know what stores have the lowest prices.
Saving money at the grocery store will also give you an incentive not to waste what you buy and to eat more homemade food.
That doesn’t mean you can never go out or order in again, but you can try cutting back on how often you do it. We all know it’s easy to save money eating at home given the cost of a night out with inflation and tipping.
Saving money may not be everyone’s priority, however. For many of us it’s debt.
If you have what you consider to be either a lot of debt or too much debt, tackling it is a better idea than saving money. If you have debt, the last thing you want is more debt.
Your goal may be to lower your debt level or pay off all your debts. In either case, there’s things you can do.
Canadians say credit cards are their most stressful debt, according to a 2023 BDO Affordability index. A whopping 29% listed credit cards as more worrying than mortgage debt, lines of credit or tax debt.
Avoiding credit cards means only spending money that you have. Using debit or cash stops your debt from growing, allowing you to focus on paying it off.
It also stops you from incurring interest on new purchases, saving you money in the long run. Always do your best to pay more than the minimum, as this saves on interest as well.
Paying off or lowering the balance on your card also improves your credit score, which is a great bonus.
Have multiple debts you struggle to keep track of? Then this might be for you.
Debt consolidation loans combine all your debts into one payment each month. It makes it easier to track your bills and pay on time.
But it can also save you money. Consolidated debts often have lower interest rates than credit cards.
Increasing your income is a great way to pay down debt faster, and there’s lots of ways to earn more.
Gig work is a popular choice because it allows you to set your own schedule. Putting the earnings towards your debt repayment makes a massive difference, even if it’s only $50 a week.
Your gig job can also improve your resume, helping you land better-paying jobs in the future.
Examples of gig work include the obvious ones of food delivery and rideshare driving, but it can also mean tutoring your friends’ kid(s) or offering music lessons if you play an instrument. The possibilities are nearly endless.
Sometimes a debt is just too big to handle. If your debt is causing you stress and keeping you up at night, some outside help may be needed.
BDO’s Licensed Insolvency Trustees offer a free consultation to evaluate your financial situation. They’ll also come up with a plan to help you become debt-free that’s tailored to your situation. There’s always help available if you’re struggling.
January 4, 2024
Looking for ways to improve your financial plans? We look at how to achieve some common financial goals like budgeting, saving and paying off debt here.
