We’re well into the New Year, and money goals for Canadians are still shaping up. How would you like to change things around in regards to debt, savings and money? Why not take advice from money experts throughout Canada?
We asked 9 experts the following question: What is your #1 money goal?
Use their knowledge to further your money goals this year and beyond.
My top priority is to stop taking the content we produce on HowToSaveMoney for granted. No matter how much you know about tricks to save money and improve your finances, it’s always exponentially easier to keep things the way they are and procrastinate making any real change. For me, that means the first step is to find a good, no-fee chequing account.
It’s been too long that I’ve been holding $4,000 in my account just so I can avoid the monthly fee. That money would be much better off in my savings account or otherwise invested. I know that, but with all the strings attached to the chequing account (car payments, payroll deposits), it can seem like a lot of work to make the change.
So, I want to finally move over to Tangerine’s chequing account. It’s a simple goal, but it’s something I’ve been putting off forever now. This year is the year of retrospection, so maybe it’s time to really face what you’ve been avoiding and finally get it done.
Buy a condo and start saving all over again. After several years of saving and building up my credit, I’m currently going through the motions of purchasing a condo. The thought of my “buffer fund” suddenly vanishing is a little bit intimidating, so my #1 goal is to purchase my condo and start building towards my next saving goal.
There are three reasons why I want to get into the real estate market:
- An investment: I’d rather view my living situation as an investment and not an expense, and I feel that paying rent forever is wasteful. Every mortgage payment increases my net worth, whereas every rent payment decreases it; I don’t want to pay down someone else’s mortgage.
- Decreasing my living costs in retirement: Owning my own home will ultimately make my retirement savings go further, as my living expenses will drastically decrease once I’ve paid my mortgage off. If you look at how rent prices have increased over the past two decades, the cost of living has skyrocketed, so locking in a good mortgage rate today means that in 20 years, my housing costs will hardly change.
- A store of value: Real estate is a “hard asset”, and a store of value that gradually appreciates over time and doesn’t fluctuate as wildly as the stock market. It doesn’t really matter whether there is a trade war with China or if there’s a spike in unemployment. Short term ebbs and flows don’t matter when you’re investing on a 25-year horizon. Yes, I could invest in the stock market and gain 25% in a year, but I could also lose 25%; this doesn’t happen in real estate.
Bacon is Magic
This year’s goal is to diversify my revenue streams. I’ve been blogging for ten years with a typical revenue approach of advertising, sponsorships, affiliates and public speaking.
I’m trying out a few new opportunities that I have not attempted before that could be profitable. As I have a solid base, it’s time to try new things and minimize my dependency on current streams, in case one isn’t as profitable as it has been in the past.
In terms of money goals, I’d have to say my number-one priority is to max out my TFSA and RRSP contributions. I’ve built up and emptied my TFSA a few times, being involved in real estate and rentals. However, now that I am in a strong financial position with zero consumer debt and very low monthly expenses, I am in a situation where I can really take advantage of these registered accounts.
Being in a higher tax bracket, the RRSP is my number-one target right now. My tax return this year will be a good head start in terms of contributions, and after all my expenses are paid, I plan on using a large chunk of the remainder to continue building my RRSP. After that, I’ll target my TFSA.
Mixed Up Money
My main financial goal for the new year has been to be more intentional with my spending. All I mean by this is that I want to ensure that every dollar that goes towards my variable expenses (or expenses that don’t have a required place) is worthwhile. Last year, I was spending my money freely without consequence, and although I’m still doing okay financially, I want to ensure that lifestyle inflation doesn’t creep in.
It’s quite surprising how small purchases that you think are harmless can spiral into a handful of large expenses over time. I’m managing my intentional spending by doing a lot more tracking, and by completing financial reviews at the month-end.
On the last Sunday of each month, I sit down and go through my online banking to see if there are any expenses that weren’t “worth it.” If one or two expenses stick out, I make it my goal for the following month to cut back on those specific costs.
Fresh Start Recovery
I’d like to be able to get out of my divorce debt-free, with a little money left over, rather than insurmountable debt.
– Wayne Steer Fresh Start Recovery
I would say my #1 money goal for the new year is more consistency in terms of affiliate streams of income so that I can worry less about the administrative side of what I do and focus more on the creative.
Something that I am focused on for both my clients and myself is diversification. We continue to see equity markets forge ahead with significant gains. This can lead to significant asset allocation imbalances.
Let’s say an individual’s risk tolerance (how comfortable they are with taking on risk with their investments) lead them to have a target allocation of 50% bonds and 50% stocks.
If you started with $5,000 investments in both Stocks and Bonds, based on their performance they would deviate from your stated allocation.
For example – if Bonds stayed flat and Stocks increased by 20%, you would now have an allocation of 55% Stocks and 45% Bonds.
Leaving your assets untouched for a longer period of time can create large imbalances. Individuals should review if their investment performance has left their asset allocation out of sync with their goals and risk tolerance.
Given the recent runs experienced in the stock market, it might be time for individuals to determine if they are comfortable with their current allocation, and the underlying risk that it represents.
Personally, I am exploring the purchase of a rental property to turn some unrealized gains into a tangible asset. Naturally, this is not a suitable approach for many. But simply taking steps to ensure that your Equity/Fixed Income/Cash allocation within your overall portfolio is aligned to your risk tolerance is critical.
–Eric Vallee Novel Financial
Success to Saving
Sharing goals can be so motivating. I have two which I think would be applicable to many.
Maximize all the ‘free’ money available to me from my company
My company matches contributions to my RRSP up to a certain point. If I put in 6% of my salary they will put in an additional 3%. This is what I call ‘free money’; if I save directly from my paycheque (something that is good for my long-term goals anyway), the company will put in additional money that I wouldn’t get otherwise! My firm also does something similar with stock purchases.
Most medium and large companies have incentives and benefits in place if you save. If you don’t know what is available at your company, ask your HR department.
Fully fund my TFSA
This is an annual goal for me. This year, the max contribution is $6,000, which is a great goal of $500 a month. The TFSA has huge tax benefits that allow your money to grow without having to pay taxes. The tax benefits are a plus. In addition, to the flexibility of the TFSA makes this my second saving goal (after maximizing company matching) every year.
The Diversity of Money Goals
As you can see, each expert tackled the New Year Money Goals question from a different perspective. Some are investing further in the stock market, or in their RRSP or TFSA. Others are buying property. Some are diversifying their income and finding new revenue streams. Still others are choosing to spend the money they have more wisely. Each approach is valid for them, and could apply to your own life. What is your money goal for the New Year?