In Canada, our annual tax cycle ends sixty days into the new year. Many people wait until the last minute to make their RRSP contributions, but that’s not the way it has to be. In fact, investing on a regular basis can make it easier to achieve your financial goals. I recommend starting to save for the next year as soon as the previous one ends…
As a wealth management consultant, it’s my job to help people create effective strategies for realizing financial freedom. Money certainly isn’t the most important thing in the world, but it is a useful tool for achieving what matters to you, whether that’s buying your dream home or enjoying your retirement. Below are my three principles for savvy saving.
Schedule An Annual Financial Checkup
You shouldn’t wait until you’re on death’s door to see a doctor. It’s common knowledge that accessing medical attention on a regular basis can save your life. It also pays to consult an expert when it comes to your financial health. Find a financial planner you trust, and make sure to sit down with them at least once annually for a crucial financial checkup. For financial planning professionals, it’s our job to help clients sort through their personal finances. If you like analogies, think of my peers and me as doctors for your wallet!
Choose a Realistic Budget For Investing
A financial planning professional can help you decide on a realistic budget for investing. As passionate as I am about saving for the future, even I don’t recommend straining your finances in order to set money aside. Being financially responsible doesn’t have to mean eating hotdogs every night for dinner and never splurging on vacations. Rather, the goal is to strike a healthy balance. Saving for the future is vital, but your quality of life in the present matters, too.
Set Up An Automatic Savings Plan
Rather than waiting until the last minute to put whatever money you can scrounge up into an RRSP or TFSA, automate your savings instead. Consider having a percentage of your pay cheque automatically go into investments each month. That way, there won’t be any temptation to spend the money you ought to be putting aside, and you won’t be rushing around come tax time! What happens if you receive an unexpected windfall? Well, you can always top up your contributions if you need to!
*header photo by Micheile Henderson on Unsplash