Wow, can you believe that the end of 2017 is fast approaching?
With the holidays coming in December, you're probably fighting to get those last minute gift ideas out of your head and into your Amazon shopping cart.
You're busy, I get it. You have to find the time to finish your shopping, see family and friends for the holidays, go on those cute winter dates with your partner and enjoy all of the hot chocolate and cookies! But let me be your friendly financial advisor and remind you: don't forget to review your finances before year end!
With almost a full year of spending, investing and saving, you'd be surprised at what's been happening in your accounts!
Here are some questions to ask yourself before we wrap 2017 up to ensure you have a solid financial footing for 2018:
Spending more than I can afford
Sometimes, we overspend on things we can't afford. Can you get out of it? For sure. In 2018, consider starting a budget. Track your average monthly income and see how many dolla dolla bills you must allocate to each expense category: groceries, transportation, entertainment, clothing, insurance, rent, cellphone, utilities, etc. This will help you be more disciplined in saving and spending within your means.
Haven't established that emergency fund yet? It's okay, turn a new page in 2018 and re-adjust. After you build your budget, ensure you set up a percentage of your paycheque to pay yourself first and establish that emergency fund. Seeing the numbers laid out will help you understand where the inefficiencies are in your spending.
TFSA or RRSP?
I get this question a lot, and it really depends. If you do have some extra savings, you want to consider investing and growing these funds tax free and tax deferred. Depending on your income and savings, a mix of both or simply one of the two could be the most efficient. Plan it out with your accountant and financial advisor for the best results.
Pay off that Debt
Best advice: pay your smallest debts first and eliminate them. If you owe $250 on your credit card, tackle it. Eliminate it.
When it comes to loans like your mortgage, if you have extra savings, paying off a little more on your mortgage (depends on your mortgage rules) can help you reach a mortgage free home sooner!
Or, you could stick to the normal payments if you see better investment opportunities in the markets. This is a whole other topic to discuss, so we'll leave that for another time.
The markets have been hot hot hot!
I really hope you were invested in the markets in 2017! It was a hot one!
Overall, equity markets killed it worldwide. Bitcoin had an amazing 800%+ return since January 2017 (and I'm still crying about not getting in when I had a chance). Real estate prices continued to boom, regardless of government intervention. It was a crazy, awesome year to make some money.
Ask yourself if you're in the best position to grow your wealth. If you aren't happy with your past investment performance, consider better options to grow your investments.
All in all, we have a new year fast approaching with wonderful opportunities ahead of us. Take initiative to control and understand your finances. We'll be here to guide you along the way.