Retirement Planning in 1, 2, 3 and 4!
It’s a daunting task for sure but worth the effort and easier than you think.
- Figure out how much monthly income you’ll need to live, pay your bills and lead the retirement lifestyle you’d like to have.
- How much do you need to save to achieve this?
- How much monthly income will you receive from other sources (like government pensions, from other investments or savings you may already have)?
- Set up a savings plan to get you on the path to your retirement savings goal.
Tip: Go to your bank’s website and use their calculators to help you with 2 and 3.
Posted: March 5th, 2014 under CEO of the House, Money & Lifestyle, Money Savvy Tips.
Tags: Budget, Dear Piggy Bank, Education, Financial Planning, Money & Stress, Money Systems, Retirement
Do I Really Need a Retirement Plan?
There are lots of reasons to procrastinate:
- I don’t have my taxes figured out yet
- I don’t know how
- I don’t know where to start
- I don’t know how much I’ll need
- I’m young and have lots of time until retirement
- I don’t have any extra money to save for retirement, I need it now
- I have a pension/retirement plan through work
But there are better reasons to do it:
- If you have a plan, you will achieve more than if you don’t
- Starting sooner than later or not at all means you will have something saved
- A simple plan is not hard to do and a great start, it will develop as you refine your needs and grow your knowledge
- Anxiety relating to finances can be stressful, this will be a huge step to reducing your worries
Posted: February 26th, 2014 under CEO of the House, Money & Lifestyle, Money Savvy Tips.
Tags: Budget, Dear Piggy Bank, Education, Financial Planning, Money & Stress, Retirement
RSP’s – What they can do for you!
It’s that time of year again when banks, credit unions and investment advisors are talking about RSP’s. There’s nothing like a deadline to prompt people to action.
How can a RSP help you?
- Saving for your retirement is a good thing to do – even though it may seem like ages in the future, starting sooner = more time for your money to grow
- While the savings are sheltered in a RSP, you do not pay tax on the investment or growth
- The impact on your income tax return means less tax paid now
- There are programs that allow you to remove RSP savings and use them towards the down payment on your first home or to return to school (review the program details to understand how it works)
- If you find yourself in a tough situation with no other options, savings are savings and they can be used to bail you out
Key points to remember:
- There is a limit to the amount you can put in a RSP – Check your income tax assessment for details
- The investment deadline to use a RSP savings tax receipt against your 2013 taxes is March 3, 2014
- Understand what you are investing your savings in – if you don’t have time to figure it out now, invest your RSP into something that allows you to change it later without restrictions or fees
- If you are married or common law, work together to learn how to structure your savings to your best advantage, now and in the future
If you’re able to set up a regular savings plan, you won’t have to worry about the deadline and invest in the busy season – much less hassle.
Posted: February 19th, 2014 under CEO of the House, Money & Lifestyle, Money Savvy Tips.
Tags: Dear Piggy Bank, Education, Financial Planning, Retirement
Take Control of Your Money in 2014! Part 6 – Staying on Track
You’ve done the math and set the plan. How is it going? A plan is the key and a budget is simply a tool you use to reach your goals. What happens if you go off track?
The first step is to check in and see how it’s working. Compare your actual spending to your budget. It may be tempting to just check your bank balance and if the bills are still being paid, leave it at that but…..cash flow can be a tricky thing and sometimes it seems as if there’s money for all the bills but if you are spending more than you make, it will won’t be long before there isn’t enough in to pay rent or car insurance.
Checking once a month can be simplified once you’re confident that your fixed or regular bills (rent/housing, food, utilities etc.) are consistent and falling within your budgeted amount for these items. Discretionary or variable spending (entertainment, gifts, clothing, holidays etc.) can be the wild card and these are the ones to watch. Compare actual to budget so you can understand what’s fine (within budget) and what’s not.
Some tips to keep you on track:
- Set yourself a weekly spending limit on things that you know are a challenge
- Use cash to pay for items in these categories, taking out your ‘limit’ on a certain day each week
- Keep a buffer in your account of a few hundred dollars to cover off bills that fluctuate
- Set up automatic savings plans so the money doesn’t hang about in your account
- Monitor your spending against your budget
- If you are over budget, understand why and decide whether it was a manageable blip or a problem needing a solution – be creative! If it’s too tempting to buy when you’re window shopping, leave the cards at home!
Posted: February 13th, 2014 under CEO of the House, Money & Lifestyle, Money Savvy Tips, Tips & Tricks.
Tags: Budget, Cash Flow, Dear Piggy Bank, Financial Planning, Money & Stress, Money Systems
Take Control of Your Money in 2014! Part 5
You know your goals and what you typically spend each month. Before you compare it to your monthly income…..review the spend categories and consider which ones you could spend less on and how much.
Now compare your actual expenses to your monthly income. Does it cover them? How about if you add in some savings or debt repayment (whatever will help you meet your goals)?
The trick is finding the money. Before we jump to finding a second job, consider other streams of incoming money you may have. Do you typically get a tax refund? How about a bonus? Are you paid biweekly (this can equal 2 extra paychecks each year if you can live on the other 24 – 2 per month)? Do you work overtime or extra work? What does this add to? Perhaps this is a way you can fund your goals? The trick is to know what you plan to do with this money as soon as it lands in your hands….put it directly to your goal(s) rather than letting it run through your fingers.
Another place to look is to reduce expenses in areas where you have the most control such as entertainment, clothing or gifts. Other changes to cut costs may be more drastic lifestyle changes such as a change in vehicle.
Increasing income is often an option but may not give you a quick fix.
Maybe it’s a combination of the above that makes your budget balance.
Next week we’ll look at keeping on track with your plan and budget.
Posted: February 5th, 2014 under CEO of the House, Money & Lifestyle, Money Savvy Tips, Tips & Tricks.
Tags: Budget, Dear Piggy Bank, Education, Financial Planning, Money & Stress
Take Control of Your Money in 2014! Step 4
Before we move straight to making the 2014 plan, now is a good time to consider the reasons why this might not work. Not to be negative but often I hear people say ‘I’ve tried this before’ or ‘It never seems to work’ so let’s get the barriers to success right onto the table. They might be:
- I don’t know where to start
- I don’t make enough money
- I don’t have time to deal with this
- I’ve got lots of time to plan for retirement or save for a house
Here are some suggestions one by one:
- Follow this series of blog posts to set a simple plan with clear action steps and take them on one at a time – before you know it, you’ll be a long way along the path!
- Next post we’ll take a look at balancing the numbers and yes, sometimes earning more money becomes one of the action steps
- Once your plan is designed, it takes about 15 minutes a month which is not a lot of time to feel good about your financial future
- Starting early gives you advantages over a delayed savings plan which can mean a lot less saving to do in the long run and don’t forget, these are big things to save for and broken down into smaller chunks makes it easier for most to manage
Step 5 is designing the action plan and smoothing out the wrinkles to make a balanced budget.
Posted: January 28th, 2014 under CEO of the House, Money & Lifestyle, Money Savvy Tips.
Tags: Budget, Cash Flow, Dear Piggy Bank, Education, Financial Planning, Money & Stress, Money Systems
Take Control of Your Money in 2014! Part 3
It’s time to roll up your sleeves and get to work in Step 3. If you’ve already gathered your financial information such as pay cheques, bank and credit card statements you’re all set. If you haven’t, now’s the time to do it.
If you’re comfortable using Excel then it will make calculations easier but I often gravitate towards pen, paper and a calculator. Whatever works for you. Essentially there are 5 categories to complete:
- Monthly net income (after taxes and deductions)
- Regular monthly expenses (even if they’re not exactly the same every month, things like food, transportation and utility bills are surprisingly similar each month)
- Typical monthly spending on wants – entertainment, lifestyle and clothing
- Large annual expenses including vacations – add them up and divide by 12
- Savings and goals – use a monthly amount for each one
Put #1 in big numbers at the top of a page and then put the totals for 2, 3, 4 and 5 below. Starting with #1, subtract the totals for expenses and savings one by one. Is there enough monthly income to cover all of them? If not, how much do you need?
We’ll take a look at how to use the numbers to make a plan to help you achieve your goals.
Posted: January 22nd, 2014 under CEO of the House, Money & Lifestyle, Money Savvy Tips.
Tags: Budget, Dear Piggy Bank, Financial Planning, Money & Stress, Money Systems
Take Control of Your Money in 2014! Part 2
Once you’ve got your goals in mind it’s a good time to step back and review them to make sure they are in line with your values. Try to prioritize them despite that some may be longer term goals. If you’re having trouble deciding between two or more goals, take them two at a time and rank them #1 and #2, then take the next one and rank it against #2. If the third one is more important, evaluate it against the #1.
For example: Let’s say Mary would like a 1) new car 2) a holiday 3) a new couch and 4) a start on retirement but she’s not sure how to prioritize them. Taking the first two, Mary wants the holiday more than the car. Comparing the couch to the car, Mary wants the couch more. At this point they are ranked 1) holiday 2) couch 3) car. Factoring in the retirement is a bit more challenging because not having a solid plan makes her feel anxious and she knows she should get started. Comparing it to car, then couch and then holiday she realizes that it’s time to put it first so now the ranking is 1) retirement 2) holiday 3) couch and 4) car.
By comparing only two at a time, it is often easier to decide which you want more whether it’s financial goals, meals for dinner or what to wear!
That’s Step 2 and next time it’s Step 3. In preparation for Step 3, gather your pay stub, credit card bills, bank statements or any other documentation or statements that give you information about the ins and outs of your money.
Posted: January 14th, 2014 under CEO of the House, Money & Lifestyle, Money Savvy Tips.
Tags: Budget, Cash Flow, Dear Piggy Bank, Financial Planning, Money & Stress, Money Systems
Take Control of Your Money in 2014!
Wouldn’t it feel great to have your financial affairs sorted? The first steps are quite straightforward and relatively simple. The key is making your lifestyle and your finances fit together so they balance! This can be a little tougher but if it’s important to you, the rewards are worth it.
We’ll go through the steps one by one over the next few weeks and before you know it, you’ll be managing your money with ease and satisfaction.
The first step is defining what you want to achieve whether it is a lifestyle, a thing, no more debt or a solid start to a future goal such as a home purchase or retirement. Start with 3 goals and estimate what it will cost or what you need to do to achieve each one. For example the cost of a new vehicle or if it’s work/life balance you’re working towards (with less of the work = part time?), note what it will take to reach your goal. When do you want to be driving the new car or how long until you’d like to be retired. Measure the timeline in months if it’s less than 2 years or years if it’s more than 2 years.
If you’ve tried this before and found challenges, barriers, hurdles or reasons that have prevented you from being successful – note them down. Your plan will work this time if you clear troublesome roadblocks at the beginning of the journey.
That’s Step #1. Step #2 next week.
Posted: January 8th, 2014 under CEO of the House, Money & Lifestyle, Money Savvy Tips, Tips & Tricks.
Tags: Budget, Dear Piggy Bank, Financial Planning, Money Systems
Get a Head Start on Your 2014 Financial Plan With 1 Step
The holidays are just around the corner and so is the new year!
Get a head start on your 2014 financial plan by taking one small but very important step. Think of 3 things you would like to achieve in the following time frames:
- A short term goal – 1 Year
- A medium term goal – 2 to 3 Years
- A longer term goal – 5 Years +
They can be value or lifestyle based as long as they are important to you. This is something we do every year over the holidays and it feels great to start the new year knowing what we’re working towards.
Once 2014 begins, we’ll get started on designing a plan to make them reality.
Posted: December 18th, 2013 under CEO of the House, Money & Lifestyle, Money Savvy Tips.
Tags: Dear Piggy Bank, Financial Planning, Money Systems