A New Year and Fresh Start. What are Your Financial Goals for 2024?

January 10, 2024

At the start of a new year, many of us make resolutions designed to help us work on changes we want to make. Financial resolutions are on the top of most lists. Now more than ever it is important to assess your personal financial situation and create goals for 2024 that are important to you.

When setting any resolution, it is critical to evaluate and understand how to achieve success. Completing this process is especially important when thinking through and setting your financial goals. Keep these three tips in mind to help with setting resolutions:

• be sure to have an accurate assessment of your current financial situation

• be realistic and set goals that are obtainable

• do not create too many resolutions, so you can focus your attention on achieving what is most important to you

With this information you can develop a detailed plan with measurable goals.

Common New Year’s resolutions for your finances

Save More

Setting money aside for emergencies, unforeseen expenses or as a buffer in the case of a loss of income is an essential goal. Open a savings account where funds are kept separate from money that is used for everyday expenses such as bill payments or grocery shopping. Although these funds should be readily accessible, it should not be overly convenient to withdraw them to avoid impulse purchases.

Next, evaluate mid-term savings goals such as the down payment for a home or a new vehicle purchase, along with long- term savings goals such as retirement. Calculate the amount that will be needed and understand the time horizon when the funds will be required. This will help to set a scheduled savings plan to meet this savings goal.

Pay Down Debt

Some debt is a practical necessity especially when purchasing large ticket items like a family home. The problem with debt can come when it is created by wants versus needs and the collective balance owed becomes unmanageable. To help control debt levels and avoid spur of the moment spending, regularly assess what is needed within the household and only purchase these items. To efficiently pay down debt start with the highest interest charging instruments such as credit cards. Set up a schedule and try to pay these down quicker with more than just the required minimum payment. If more is paid monthly, the additional money will go directly towards the amount owed and interest charges will lessen.

Evaluate Insurance Needs

Many times, we do not understand the value of adequate insurance until it is needed. Insurance is designed to provide financial assistance for the unforeseen circumstances that could happen in life. There are many forms of insurance protection including disability or critical illness insurance, life or long-term care insurance. Speak with an insurance advisor to have a full assessment of your personal circumstances and to match the right insurance solution for you.

Prepare or Update Your Powers-of-Attorney and Will

A Will itemizes the distribution of assets upon your passing. It can also allow for the guardianship of minor children and provides financial instructions for disabled dependents. Passing away without a valid Will can result in additional legal costs and family disagreements. Without a valid Will in place, your estate will be distributed in accordance with The Succession Act 2019. Powers-of-Attorney for your finances and health are essential documents where you appoint an individual to manage your finances and property or make health care decisions on your behalf. No one, not even immediate family, can automatically step in to make decisions and may have to go to court to be appointed as a guardian.

Assessment of investment accounts

Completing regular reviews of your existing investment accounts with an advisor is essential to ensure continued success in reaching your goals. Evaluate your time horizon, objectives and risk tolerance to make certain the investments are suitable for you.

Steps to help achieve your financial resolutions

• update your budget to ensure that the goals established are realistic within your financial capacity

• use your budget to identify monies available for savings or paying down debt. Subtract all fixed expenses from your net income to identify any surplus

• define and prioritize goals with no more than two or three goals per year

• conduct a periodic review of your progress

• work with an advisor to assist with goal setting and opening the correct products and services needed to be successful in achieving your objectives

All financial goals should be well-thought out with a specific and detailed plan and a measurable outcome. Write your goals down and keep them in a place where you are reminded of them often. Keeping your financial resolutions top-of-mind will help keep you focused on achieving your important goals.

FirstOntario Credit Union in partnership with Credential Securities and Credential Asset Management Inc. has an experienced team of advisors specializing in various areas of wealth management including retirement planning, investment management, estate and succession planning, individual financial risk management and more. These professionals are here to help you plan for the future and reach your financial goals. Visit FirstOntario.com/Investments or call 1-800-616-8878 ext. 1700 to connect with a FirstOntario advisor and start growing your wealth today – your way.

Mutual funds, other securities and securities related financial planning services are offered through Credential Securities, a division of Credential Qtrade Securities Inc. Credential Securities is a registered mark owned by Aviso Wealth Inc. Mutual funds and related financial planning services are offered through Credential Asset Management Inc. Unless otherwise stated, mutual fund securities and cash balances are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer that insures deposits in credit unions.