There’s a resolution revolution a-comin’! A few days from now, as the old year gives way to the
new, Canadians everywhere will be making promises to themselves. Big promises (I resolve to
quit smoking.) and not-so-big-promises (I resolve to call my aunt more often.). But here’s one
promise you should make and never break: “I resolve to be financially secure.” And here are ten
simple ways to make that happen:
1. Budget better Look carefully at your income and expenses — then set a realistic
budget that includes savings.
2. Defeat debt Keep that high-interest credit card in your pocket – or better yet, cut it into
little pieces. Credit card debt is very expensive. Stay on top of your debt by paying off
high interest and non-deductible debt first.
3. Set goals Make sure your lifestyle expectations match – and don’t exceed – your
income. Be sure to set aside enough regularly to reach your goals.
4. Register yourself Investments held within a Tax-Free Savings Account (TFSA) allows
for tax-free income and an RRSP is a terrific tax-deferred savings builder. Start early,
make your maximum yearly contributions and you’ll save on tax and enjoy years of taxfree
growth in a TFSA and tax-sheltered compound growth in a RRSP.
5. Trim taxes There are lots of tax deductions and tax credits – be sure you take full
advantage of every one that applies to you.
6. Invest efficiently Interest income is taxed significantly higher than dividends or capital
gains – so it’s usually better to hold investments earning interest income in a TFSA or a
tax-deferred RRSP and those that earn dividends or attract capital gains in your nonregistered
7. Invest in your child’s future A post-secondary education is expensive but necessary.
Help your kids pay for it by starting a tax-deferred, compound growth Registered
Education Savings Plan (RESP) eligible investments now!
8. Insure change Your life is always changing in one way or another – that means your
need for income protection and estate planning are changing, too. Be sure your
insurance coverage keeps pace.
9. Assist your assets Good asset allocation is vital to good long-term investment growth.
Get steadier returns over time with the right balance of assets from the three asset
categories – cash, fixed-income investments and equities.
10. Wrap it all in a plan The tenth step to financial security is to wrap the other nine steps
in a comprehensive financial plan that will get you where you want to go.
Achieving financial security – now, that is a resolution you can take to the bank. Your
professional advisor can help you get there.
Michelle White is a Consultant with Investors Group Financial Services Inc. in Ottawa. For more information contact her at firstname.lastname@example.org 613-723-7200.