New year, new market, new goals.
And just like that another year is behind us - yet another marked by more “unprecedented” times, once-in-a-lifetime events and mountains of uncertainty. For many of us, 2022 brought more questions than it did answers and and left us feeling uncertain about what 2023 will bring for our health, our finances, and the wellness of ourselves and our families.
So in these final days of the year we are focusing on not just the wins of the year past, but the tools we can use to achieve our goals in the year ahead, and we invite you to do the same.
We are in this together!
Taking stock of where you are at
The first step in setting achievable financial goals - no matter how simple or how grande - is to get a solid understanding of where you are starting from. Sitting down with a pen and paper (or a spreadsheet, if you’re like us) and outlining all of your household income, all of your assets, all your outstanding debts and all of your monthly financial obligations can be daunting, but is truly the only way to set a foundation for growth or even maintaining status quo.
Be sure and colour code (since it makes it just a bit more fun) and take note of:
income streams (include employment, investments, bonus/overtime income, Child Tax Benefit payments etc)
major and minor debts and their minimum payments (mortgage, credit cards, student loans, car payments etc)
monthly bills (utilities, insurance, telecom etc)
other regular expenses (groceries, gas, child care etc)
This will give you a bird’s-eye view of your financial picture and help you to see where you have room for growth!
Prioritize
Once you have a solid understanding of your financial situation, you will be better able to prioritize your financial goals for the year ahead.
For example, if you can see that you are left with little to spare at the end of each month, then perhaps your first priorities should be to decrease expenses, increase income if possible or create a safety net. Or, if you see you have some wiggle room then perhaps investing in longer-term assets and growth can take priority. For most of us, a great order in which to prioritize our cash flow goes something like this:
Monthly essentials including shelter costs (mortgage and home costs), groceries, childcare, home and vehicle maintenance, insurance
Debt repayments
Focus on your highest interest debts first
Continue making at least your minimum monthly payments on each, but focus extra cash on the highest rate ones first
Emergency fund
If you haven’t yet done so, aim to save enough to cover around 6 months of your monthly essentials
This will ensure that should you fall on some financial hardship, you will have some breathing room!
Long and short term savings
After all of the above is covered, then you can allocate cash flow to saving for short term life events (trips, weddings, large purchases) and long term goals (children’s school, retirement)
Remember that when used wisely your mortgage can be tool for tackling some of the above. For example, consolidating high interest debts into your mortgage or pulling equity from your home to create a safety net. Of course, money borrowed from your home is still a loan that must be repaid and carries some risk, being intentional with your equity can help bring you peace of mind during uncertain times.
No more keeping up with the Joneses
In 2023 (and for the rest of time) let’s stop focusing on what our neighbours have and instead focus on what is best for us and our families.
We speak with clients every day who are putting undue pressure on themselves to achieve specific financial goals because they feel like they have to or that they are somehow behind. But this year especially, as we head into a period of decline, comparison will be a thief of joy. Everyone’s financial picture is affected by market fluctuations differently, so setting your goals based on someone else’s situation doesn’t even make sense!
If you want to grow in 2023, purchase your first (or next) property and take advantage of this slower period, that is fantastic! And if you have your sights set on simply riding out the storm comfortably until we see what the next season brings, that is wonderful as well!
Whatever your financial goals are for the year ahead your Happiness Creators are here to help you achieve them. Whether you feel like you are starting from square one or are deep into your financial journey, we are here to lend a hand now and always!
Here’s to an amazing year, no matter how that looks for you!
