Take these simple steps toward improving your financial situation now, and you'll be thanking yourself next year.
Have you ever wondered why some people are doing better than you financially, even though they come from similar backgrounds and likely have similar income levels? We see this every day with individuals who, on the surface, should be further ahead but are struggling to make ends meet. While many experience a life event that puts their finances behind for a period of time, some are able to manage challenges and move ahead more successfully. What makes them different? What are they doing that others are not?
If you're serious about improving your overall financial situation, here are some changes to implement that'll put you on the path to monetary well-being.
1. Outline a plan for managing your income and expenses. In simple terms, this is called a budget, but a budget is a static document, while a plan is a fluid one that adapts to your changing circumstances and helps you get maximum value from the money you earn.
2. Pay more than the minimum on debt. Debt can eat up a sizable portion of your income; in Canada, we have one of the highest debt levels in the world. Making only the minimum payments on what you owe means you'll be paying a lot of interest for years to come, money that could have gone toward saving for your future.
3. Improve your monetary knowledge and skills. Financial literacy isn't rocket science, but it takes some time, effort and practice to understand and become proficient at making decisions about cash, credit and investments. There's a lot of information available to help you get started, including free workshops and webinars.
4. Automate your savings. The reality is that not enough of us put ourselves at the top of our paycheques. Instead, we pay our expenses first, then we become frustrated when there isn't enough—or anything—left to save. Think of your future by having your financial institution automatically transfer a set amount of money into a separate savings account each time you get paid.
5. Seek professional help. World-class athletes and successful business execs rely on personal coaches to help them excel in their professional and personal lives. If you want to improve your monetary well-being, seek advice from a certified credit counsellor to address your situation and better your money-management skills. If you're unsure about how to invest your savings, speak with a qualified financial planner to map out a plan that fits your investment style. The key to moving forward is taking little steps in the right direction—and getting help when you need it.