Sunday, 1 January 2012

Your 2012 Financial Checklist

How much debt am I in?
This is your total debt, mortgage, credit cards, unpaid bills, money you owe family. Make an exhaustive list and tackle the high interest debt first.

How can I improve my financial outlook?
If you have been in the same job for a while, with the same salary, look at taking a class or course that might help with a promotion and ultimately make more money. This year start networking again and find out what other opportunities are available. I would start by getting in touch with former colleagues and see if they can meet you for a coffee.

Am I on track for good retirement?
No matter what your salary is you should be putting 10 per cent of your after tax income towards your retirement. This is outside of your long-term savings or any other big ticket item you may be saving up for. Remember there are other options than stocks and bonds. You can save your money and put a down payment on real estate, purchase GIC’s or invest in a business.  This is an investment you want to set up to use after you turn 65.

How can I better understand the benefits of a TSFA and RRSP?
Figuring out what works for you can be confusing. Here are my two recommendations. If you’re saving for your retirement and your tendency is to make impulse purchases, an RRSP might be better for you because the money is harder to access. Also, if you're just starting out in your career and anticipate making more money in the next few years, you  can save the room in your RRSP for when the tax incentive in better to contribute. 

Am I going to try to get out of debt or be a saver this year?
If you have high interest debt you should concentrate on paying that off rather than saving money. Paying off a few hundred dollars on you credit card will represent a larger amount of money over the term if you are paying 19 per cent on a credit card. If you have no high interest debt then making a commitment to save a pre-determined amount every month will add up to significant savings over a 12 month period.  

Watch the full interview as it aired on CTV Newschannel. 2012 Financial Checklist

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