Are you looking forward to a fresh start in the new year? If so, you’re not alone. Improve your financial situation by choosing some of these resolutions this year.
1. Take stock of last year
How you approach the new year will probably depend on how last year went. Do you feel your financial picture is better, worse, or about the same compared to one year ago? Now is a good time to review your investments, budget, debt level, and overall financial outlook to see what changes could become your top priority in the new year. If you feel you have knowledge gaps, consider enrolling in Investing Academy — free online courses designed to help people learn the fundamentals of how investing works.
2. See if your investing personality has changed
If you’ve experienced significant life events in the last year, your investing priorities and risk tolerance might have changed. Significant events could include losing or changing a job, having a child, getting married or divorced. Take this quiz to learn more about your current investing personality.
3. Rewrite your budget if you need to
A new year is a good time to check in with your monthly cash flow. You probably have a sense of where you might want to adjust your expenses. And if you don’t already have a budget, you can follow these simple steps to make one. Or try our cash flow calculator to get a snapshot of where your money is going.
4. Plan your saving or investing contribution strategy
If you’re not doing it already, consider making regular savings contributions to accounts such as a TFSA, RRSP or FHSA. Keep in mind, you’ll maximize your interest the earlier in the year you start contributing. This is because there will be more months left in the year for the interest to compound.
For your investments, you could consider spreading contributions throughout the year to take advantage of dollar cost averaging. Take stock of how much you can contribute throughout the year and when it makes sense for you.
5. Re-focus on your big goals
Now that you’ve taken a moment to consider your financial picture, do the same for your financial priorities. Have they changed? Do you want to buy your first house, or is saving for retirement your main goal? Ensure your savings and investments are in-line with these goals. And map out your financial plan.
6. Take a “no-spend” challenge
If you’ve got financial goals to save for — whether big or small — you’re probably looking for money to save. One way to determine where to reduce spending is to put a freeze on new purchases for a little while. Try a month of only spending money on essentials. Find free entertainment, raid your pantry, use the library instead of buying books. Your bank account will thank you, and you might learn some new tactics to rein in impulse spending.
7. Learn how to make better financial decisions
Knowing more about your behavioural biases can help you improve your financial decisions. Perhaps you tend to follow the crowd rather than stop and think about your own needs, or perhaps you let fears over losing money drive your choices. Being aware of your potential biases can help you manage them and plan constructively. Try the behavioural bias checker to better understanding what’s influencing your decision making.
8. Check registration
Before you invest, check the registration of anyone offering you investment advice or trying to sell you an investment. It’s easy and free. In general, anyone selling securities or offering investment advice must be registered with their provincial securities regulator.
9. Guard against fraud
Fraud can happen to anyone and it can have a devastating impact. This year, tune up your fraud detection skills by trying the scam spotter. Remember: Investment fraud can be easier to recognize – and avoid – when you know what it looks like.
10. Get in touch with us
We’re here to help. You can ask us your investing questions. You can also contact the OSC with any investing inquiries or concerns.
Summary
The new year is an opportunity to give your financial plan a fresh start. If you’re considering financial New Year’s resolutions, consider:
- Take stock of last year
- See if your investing personality has changed
- Rewrite your budget if you need to
- Plan your saving or investing contribution strategy
- Re-focus on your big goals
- Take a no-spend challenge
- Learn how to make better financial decisions
- Check registration
- Guard against fraud
- Get in touch with the OSC
