5 Rules for After the Holidays
Posted by Gail | Filed under Money Management
I’m always a little surprised when I say something is a rule and people say, “Wow! I’ve never thought of it that way.” As I wrote Money Rules, it was with an eye to all those things that seem like “common sense” to me but for many people seem like revelations. Take Rule #48: It’s Not Your Money until It’s in The Bank. People break this rule all the time, spending money they think they will be getting – be it a bonus, commission or a cheque that’s yet to clear – only to end up disappointed.
The holiday season is all about breaking the rules we consider to be common sense: we eat more than we should, we party harder than is good for us, and we indulge ourselves with a view to setting our ships back to rights when the new year rolls in.
Well, here we are: It’s 2014 and here are 5 rules that are must-dos for your post-holiday financial health.
Rule #1: Start a Spending Journal. If you’ve been loosey-goosey about how you manage your money, if you found last year that you often got to the end of the money before you got to the end of the month, it’s time to get into the driver’s seat. Buy yourself a notebook and start recording every penny you spend. Take that information and use it to see if your budget is really working for you. You do have a budget, don’t you?
Rule #2: Make a Budget. If you have no plan for how you’re going to spend your money, you shouldn’t be surprised when you don’t achieve those goals you set for yourself each year. Your budget is a road map for how you’ll use your money. No budget means you’ll likely end up in a ditch.
Rule #3: Increase Your Savings. Not participating in your company pension plan? Sign up this year. Don’t have an auto-deduct from your account to an RRSP, TFSA or other retirement savings plan? Quit procrastinating. Saving a little today means you’re not going to end up old and poor.
Rule #4: Open up a High Interest Savings Account. If you’re squirreling away money for a vacation, to pay for next year’s holiday gift giving, to cover your butt in the event of an emergency, shouldn’t your money be working as hard as you do? If your savings account pays anything less than 1% you’ve got the wrong account. Go online and find an account (Google “high interest savings account”). Close that stupid account paying you next to nothing and make your money work harder.
Rule #5: Make a Will. If you have no assets and no dependents you don’t need a will. For everyone else, a Will is all that stops the government from disposing of your assets as it sees fit. Really? You’re willing to let the government make that decision for you and your family? Get thee to a lawyer!
Will you join me in helping to raise Canada’s Money IQ? If you need a road map you can find it at www.mymoneymychoices.com. If you’ve got your money together, I encourage you to create a Tribe and share your knowledge and experience. Whether you do so within your family, your circle of friends or at work, where you worship, where you learn or where you share your love of books, I’m counting on you to help spread the word.