10 financial starter ideas to take ‘bird by bird’
Q: My wife and I are working from our Hamilton Mountain home these days. We’re still young and really want to take care of our finances. Our cash flow is OK. In fact, we have excess funds because we aren’t spending money on regular expenses, like gas, eating out or haircuts. We have savings and a retirement plan at work and are always paying down our mortgage, but all the money stuff is overwhelming. Where do we place our priorities?
A: Kudos to you both, you are well on your way to financial success. Of course, your goals may be different from what others wish for. Regardless, it’s easy to get overwhelmed by the many components of longterm financial planning, and if you tried to do everything at once, you might just give up altogether. The way to build and compound momentum in pursuit of your financial objectives is to take it a single step at a time.
One of my favourite books is “Bird by Bird” by Anne Lamott. The title came from a story of her 10-year-old brother who had a school report about birds due the next day. He had left the task to the night before, just as we have all done at some point. The little fella sat at the kitchen table with tears in his eyes, overwhelmed by the enormous pile of books about birds and the task ahead of him. Their father sat beside his son, put his arm around the boy and said, “Bird by bird, buddy. Just take it bird by bird.”
In any aspect of life, the best reminder is to take it steadily but surely, one foot in front of the other. No matter how big the goal or undertaking, everything will get done if you take it bird by bird. But if you dare look at all the tasks ahead of you, you can be immobilized with fear, defeated before you even begin.
Here are 10 starter ideas to help anyone achieve financial success. The order will be specific to your unique situation, but just nibble away at these, bird by bird:
1: Spend less than you earn and save the difference for both short and long-term financial goals.
2: Establish a systematic savings plan for your retirement. Save first, pay your monthly household bills second, then live on what’s left over.
3: Create an emergency fund, so you have ready access if needed.
4: Set aside money for major purchases like an annual holiday or a new vehicle.
5: Review your debt obligations — including maturity, prepayment privileges and interest rates — to prioritize the order in which you’ll pay these off.
6: Be sure you have sufficient life, disability and critical illness insurance to cover the major financial risks that could sideline your plans.
7: Implement a tax plan to reduce income taxes payable each year.
8: Confirm your beneficiary designations on your RRSP, TFSA, group plans and life insurance.
9: Evaluate your asset allocation to ensure your investments meet your risk/reward tolerance.
10: Prepare legal wills and powers of attorney for both property and personal care.
Each of these financial tasks has several parts to it and it may all look like a lot. But don’t let that slow you down. Remember, “bird by bird.” And you don’t have to go it alone; each task can benefit from the expertise of a qualified, caring and competent adviser.
If you or your wife ever find you have lots on your plate and start to freeze with overwhelm — in any area of life — you can support each other by saying, “Bird by bird, honey!” With the knowledge of Lamott’s story, you’ll instantly get the message and, one by one, your financial dreams will take flight.