Oh, the start of a new year. It’s a time of renewed hope for a fresh look at life. Have you recently been having those conversations, talking about your New Year’s Resolutions? Exercise more, eat better, lose weight, watch your spending or get that new job you’ve always wanted. Alright, cards on the table: I’ve given up pop and I always TRY to eat better but that’s as close as I’m coming to a New Year’s Resolution (not that you should care).
I’ve always found this time of year a little tricky. It can be difficult having the weight of expectations heaped upon you to make special effort to improve, as though you should be different on January 1st from the way you were on December 31st (minus the hangover). Many people hate resolutions.
When it comes to resolutions about money, I’ve discovered the cure to end all future resolutions:
Create a comprehensive financial plan
(Oh no, here he goes again with the boring stuff!)
In case the tone didn’t translate in my typing, that was supposed to be my wife talking while yawning. Thanks for the interest, Hun.
You see, years ago in my industry, there used to be this thing called RRSP Season (January and February) where financial advisors would run around seeing as many people as they could trying to encourage them to “buy RRSPs”. Once March rolled around, we would all be exhausted and looking for a vacation. Until one day I met an advisor that said to me, “What is RRSP season? My clients contribute all year round and they do so as part of their plan. This is just another month to me.” In essence, why would you have to try to sell people on investing for their retirement? Wasn’t it their plan to do so already? A long time ago, that was one of the things that helped me focus on creating a plan.
A financial plan that encompasses every aspect of your finances is one that lays out your action plan for every year ahead of you. It tells you how much you need to save for retirement, how you will protect your family from the financial effects of illness or injury, how you’re going to pay for your children’s education, eliminate your debt and reduce your taxes. It effectively ends the need for any New Year’s Resolutions about money. Wouldn’t it be nice NOT to have to come up with new ideas every January about how you’re going to attack the year ahead?
While no plan for the future is ever perfect, and your plan has to adapt as the needs of your family change, “done” is better than “perfect”. If done properly you will always know what your actions need to be. Always. Rather than coming up with a resolution, you start out every year RESOLVED. So where’s your plan?
This is a general source of information only. It is not intended to provide personalized tax, legal or investment advice, and is not intended as a solicitation to purchase securities. Michael Larocque is solely responsible for its content. For more information on this topic or any other financial matter, please contact an IG Wealth Management Consultant