OK, you’re not Warren Buffett, so you probably need to shape up some part of your financial life in 2011. Set realistic financial resolutions this year you can actually keep. Here are a few to consider.
Goal 1: Learn more about money
You’ll feel better equipped to make good financial choices. Take ten minutes a week to read an investment article in the paper or online. Check out www.moneyville.ca, www.globeinvestor.com, www.finance.yahoo.com. Grab a copy of Rich by Thirty, Rich by 40, Wealthy Barber, Automatic Millionaire or Stop Acting Rich. You could even sign up for a free investing course through your local bank or brokerage.
Goal 2: Get better organized
Set up a budget and follow it. Use free budgeting tools online with your bank. Keep your receipts in file folders and pay close attention to your bills to ensure they’re accurate.
Swap financial ‘chores’ with your partner or take on new ones each week like paying the bills online, negotiating interest rates, monitoring the budget or collecting receipts to track your spending.
Goal 4: Financial plan
Develop a financial plan to grow your net worth through a combination of debt reduction and asset growth. Get a second or third opinion from a Certified Financial Planner (CFP) or professional accountant. If you use a planner get a referral from someone you trust. Interview a few to see if you like them and to get a sense whether they’re realistic.
Goal 5: Track your net worth progress
Use a spreadsheet to list all assets like RRSPs and real estate, and liabilities such as car loans and mortgages. When you subtract your liabilities from your assets, you’ll see your bottom line. You want this number to grow so set some net worth goals for 2011 to reduce debt and build your assets.
Goal 6: Spend less, save more
Keep your spending within your budget to avoid incurring more debt. Try to cut back on unnecessary expenses and think ‘frugal’- buy things on sale, ask for a discount and create inexpensive fun through exercising, sports, reading, and spending quality time with friends and family. Tuck away those extra dollars in an investment.
Goal 7: Take care of yourself
Invest in your education, care for your health and reduce stress. A healthy financial situation means less stress and more opportunities to pursue your dreams.
Whatever your goals end up being, ensure they support a rich and full life. Aim to achieve balance financially, in relationships, community involvement and having fun.