Cash Flow Plan|New Year’s Resolution: Become healthier financially

7 Jan

Cash Flow Plan and New Year’s Resolutions

Cash Flow Plan|New Years Resolutions: Becoming Financially Healthy
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When it comes to making New Year’s resolutions, almost all of them include vowing to lead a healthier lifestyle, i.e., eat and drink less, lose weight and work out more often. You also need a cash flow plan to become healthier financially.

In the United States and Canada, it is estimated that 75% of us stick to that resolution for the first week or two but fewer than 10% are able to adhere to our good intention for the entire year. And many gym club regulars bemoan the period of January 1 to 15 when there is nowhere to park outside and line-ups to use the equipment inside. By January 16, the regulars know that things will be back to normal.

Experts say that one of the reasons we find it hard to achieve our ambitious resolutions is that they are too vague. It is better to commit to attending Bootcamp twice a week than to say I will go to the gym more often. My experience has shown me that clients do better with specific financial goals as well. Aiming to have $10,000 in a TFSA by June 30 is much easier to plan for and to track than “saving more money”. The key to success in both of these is that specific actions and new behaviours trump grand statements.

Many people come to me expressing a desire to get more life out of the money they already have. They are smart people who make good money but when the end of the month comes around they have little to show for it. Worse than that, they have to go into debt when a major purchase comes up. If your situation resembles this and frustrates you, it might be time for us to sit down and talk about making your cash “flow” better. Within thirty days, I believe you will start seeing some positive changes in your financial situation. A properly structured cash flow plan will definitely mean some changes in your behaviour around money, but these will be manageable. Moreover, they will be sustainable over the long term, so you won’t be one of those who makes a resolution only to break it within the first month. Following your long term plan will ensure you won’t become one of the 59% of Canadians who retire with debt.

According to this article in the Globe and Mail, paying down debt is the top priority of Canadians for the sixth year in a row, yet few of us figure out how to do that.  Albert Einstein is quoted as having said “The definition of insanity is doing the same thing over and over again and expecting different results”. You may realize that what you are doing with your money keeps on getting you the same results, yet you cannot see what you should do differently. Don’t feel bad about it; there was no high school course in Financial Literacy that you failed. Money is about more than Math; if it were only about Math, we’d all be financially secure. Set up a 15-minute phone call with me; by the end of that call I will know whether I can show you some different strategies.

Investigating a cash flow plan is an easy New Year’s resolution to set and keep, and, as always, it’s just good advice. You can reach me at 416-939-2000 or at mheenan@assante.com.