five FINANCIAL RESOLUTIONS FOR 2016

In the wake of a holiday season involving lots of eating and spending, it makes sense that our top New Year’s resolutions tend to focus on fitness and finances. Resolutions are a good first step, but without a specific plan, they can be hard to maintain for 12 months. With that in mind, here are five financial resolutions for 2016, and some tips to help you achieve them. 1. ‘ I resolve to figure out my finances’ To make it stick, any resolutions you make need to be based in reality. Start by laying out the facts: Income, expenses, debt ( both how much and what the interest is). Do you have investments? If so, where are they held?

“Before you can devise a plan based on your situation, you need to first find out what your situation is,” says Wade Stayzer, vice- president sales and service at Meridian, Ontario’s largest credit union. “Most people have no idea.”

If you’ve never gone through your finances or met with a financial adviser, make this the year you do.

2. ‘ I resolve to stick to a budget’ Knowing what you already spend is the first step to making a budget you can stick to. Once you know your after- tax income and subtract your fixed expenses (such as your mortgage or car payments), take a look at what you have left and what your expenses are. If you’re not sure what you spend, try using a free app like Mint that will track all your spending and give you weekly reports. After a couple of months you should have enough data to put together a realistic budget you can stick to.

3. ‘ I resolve to get out of debt’ Before you can tackle your debt you need to know what you owe and how much interest you are paying. Once you’ve got the facts, Stayzer recommends taking a “granular” approach to debt- related resolutions.

“(For example) ‘I resolve to pay off my most expensive debt (the credit card with the highest interested rate) in six months,’ ” he says. “From there, you can work backwards to figure out how much each month you need to set aside to chip away at this specific debt.”

4. ‘ I resolve to save more’ General goals may seem the most attainable since they don’t lock you in, but without something concrete to work toward it’s easy to get behind. If you have a specific item you’re saving for, use that as a guide; if not, the $5,500 annual TFSA contribution limit is a good goal. ( Don’t have a TFSA? Make this the year you open one.)

“Work backwards to find out how much ( you) need to save every month or every paycheque to get to the $ 5,500,” Stayzer says, adding that you can give your resolution an extra boost by setting up an automatic transfer from your bank account right into your savings vehicle of choice. 5. ‘ I resolve to stop wasting money’ This should be on everyone’s list of resolutions, but it can be hard to assess “waste” without being judgmental. Let’s assume the things you choose to spend money on are not a waste, and look elsewhere for savings. For example, when was the last time you looked at your bank fees? If you are paying high fees or, worse, additional fees every month, you probably have the wrong account type. Assess how you use your account and then look at the options available to choose something more appropriate and less expensive. The same applies to your Internet and cellphone bills — extra fees mean you don’t have the right plan for your needs, and a simple change could result in real savings. Finally, pay your bills on time. Set reminder notes in your phone if you need to, but paying late often means you get charged more, and that’s money you could better spend elsewhere.