What does your financial fitness look like?

Like every year, you’re going to reinvest it: some into the RRSP, some in the TFSA and the balance into your child’s RESP account. As a bonus, your debt is manageable and you’re fast-tracking your mortgage payments. Give yourself a round of applause because you are a financial champion! Sure you are — in a perfect world. But the truth is that like most Canadians, you’re likely carrying a lot of credit card and unsecured debt. And like the last few tax seasons, you owe the taxman a small king’s ransom.

Acquiring good financial habits and setting up a financial plan are key factors that usually ensure greater financial freedom. The first step is to adopt new and
lasting habits. Here’s how to get started: Forgive yourself: Take ownership of your past financial behaviours and start thinking about your financial goals. Be honest with yourself and know that change is possible with a plan.

Set your financial objectives: Next, write down your short- and long-term personal and financial priorities. Your financial goals should be realistic, measurable and
time-bound. They should also be aligned to your personal goals.

Create a budget that is straightforward and flexible so it can be easily modified if your income or expenses change. Be realistic and specific about your spending. Each expense item will have its own line in your budget, for example housing, groceries, utilities, transportation, investments, retirement savings, entertainment, clothing, etc. Include a line for your debt repayments and other bills.

Start saving in small increments today: Experts suggest that you should save 10 per cent of your earnings and have an emergency fund equalling a minimum of
three months worth of savings. This may be very overwhelming when you’re starting out. Try starting small by saving twenty-five dollars a week until you have
more funds available. Remember, some is better than none.

Guy Ward is a Mortgage Broker in Calgary, Alberta with TMG (The Mortgage Group Alberta).