When it comes to setting financial goals, it’s easy to get overwhelmed.
Sometimes, in the beginning, it’s best to focus on tackling just one specific goal. Make it manageable. Create some momentum. Then see where you can go from there.
A few good places to start:
1. Pay off your credit card debt.
This is the debt that almost certainly has the highest interest rate, so paying it off will make the biggest difference.
Make it a priority and start hacking away. You can try consolidating it or transferring it somewhere else to get a lower rate or a temporary pause on interest.
But more than anything, try to be realistic. Debt takes time to accumulate and it’ll take time to pay off. Getting rid of your debt and getting on track with your financial goals is a marathon, not a sprint. Consistency is key.
2. Open a TFSA and set up an automatic contribution that aligns with when you get paid.
Paying yourself first. Taxing yourself. Reverse budgeting. It’s an idea that everyone tries to name because it works. It gets you in the habit of reliably spending less than you earn because you never see the money and never get a chance to spend it.
3. Figure out where you’re at with your cash flow and net worth.
If you’re trying to go somewhere, you first need to figure out where you’re currently at.
Your finances are no different. It helps to have a clear sense of your current net worth and which direction you’re currently heading.
To figure out your net worth, add up all your assets (money in bank accounts, investments, house, car, etc.) and subtract all your liabilities (student loans, credit card debt, mortgage, car loans, lines of credit, etc.). This is your starting point.
To figure out your cash flow, add up all your sources of income and subtract all your expenses (try to be thorough).
This will help you see your current situation more clearly and figure out what you need to do to get to where you want to be.
If you have questions, or would like someone to help you set goals, create accountability, and figure out the right moves to make, book a meeting with me and let’s make it happen.