The start of a New Year is often a good time to revisit your financial goals and determine priorities. Here are some tips to help you start that process:
Set Objectives – Goal setting is the foundation of achieving financial success. Writing down your goals will help clarify and establish your personal and financial priorities.
Pay Yourself First – By planning to earmark a portion of your paycheque to emergency or retirement savings, you are actively building your wealth and planning for the future.
Minimize/Avoid Personal Debt – Since interest on personal debt, such as credit cards, car loans and a mortgage, is usually not deductible for income-tax purposes, paying it off is one of the best investments you can make. Higher amounts of personal debt can be a serious challenge to achieving financial success.
Diversify Your Investments – Few people have the time or specialized knowledge to successfully manage their own investments. By choosing a financial advisor that can guide you on selecting well-managed investment funds, you will have the benefit of professional management as well as better diversification.
Maximize Your RRSPs & TFSA’s – RRSPs & TFSA’s are often the cornerstone of a retirement financial plan. It’s important to ensure that you are making enough deposits to meet your goals. you can boost your plans by using RRSP loans, setting up monthly automatic deposit arrangements and by depositing any refunds they receive into their RRSPs.
Prepare an up-to-date Will – Deciding how your estate will be settled is important, and a professionally prepared Will makes sure that your estate gets settled quickly, reducing the risk of the courts making distribution decisions for you. Discussing Power of Attorney, and guardianship for children is a vital aspect in this process.
Reduce Your Taxes – There are not as many generous tax breaks as in the past. In addition to RRSP deposits, you may be able to further reduce their tax bill by shifting investments into the hands of lower-income family members. Also, the tax-sheltered growth within a permanent life insurance policy should not be overlooked.
By reviewing your priority list, you can choose the strategies most important to you and adopt these as your New Years Financial Resolutions. If you have any questions, or need any help, please contact us!
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