Setting long-term goals regarding your financial future is crucial
With the new year here and facing uncertain economic times, setting long-term goals regarding your financial future is crucial. It’s not as difficult as it sounds, because you don’t have to plan your whole financial future all at once. To get started, you have to identify your major goals, knowing these goals will help you make the smaller decisions along the way. With some good planning, and good luck, you should be able to attain your financial goals.
Not all your goals will be set in stone and reviewed periodically as your priorities may change over the years. However, having goals and re-examining them occasionally is a crucial part of the plan towards being financially fit.
Your goals SHOULD include:
- Buying a home (this is the only purchase you should make using non-tax-deductible debt).
- Paying off all your non-tax-deductible debt with an interest rate higher than 8%.
- Paying yourself first.
- Investing in RRSP or Tax free savings account.
- Having financial freedom to do what you want.
Your goals MIGHT include:
- If you have or plan to have children, ensuring that the mortgage on your home will be paid off before your children enter university. This will free up funds for their education.
- Be better organized.
- Making life simpler.
- Having an emergency fund of $10,000 in Tax Free Savings Account.
- Saving for a vehicle.
- Paying for your own education.
- Paying for your children’s education.
- Saving money to travel around the world.
- Quitting your job.
- Taking a sabbatical from your job.
- Taking a lower-paying job that you like better.
- Starting your own business.
- Retiring early.
- Having enough money for full-time care should you become incapacitated, so you won’t be a burden on your family.
With the help of a professional setting realistic financial goals will be simple and stress free. The weight of debt only gets heavier with time, and debt doesn’t go away unless you have a plan to get rid of it.
Contributed by Andrew Brown, Tax Accountant
Bryce Brown Accounting Services
Bryce Brown Accounting Services specializes in providing accounting and tax services for self-employed individuals such as real estate agents and small to medium sized corporations. Also specialize in representing clients during CRA audit and appeals.