With a new year around the corner, some of us are reflecting on our goals for 2022. If you want to make changes around your financial habits, read on.
Shannon McNutt is a financial advisor with IG Wealth Management in Charlottetown. Here are her 5 tips for how to stick to your financial goals.
1. Have a plan
"Outline your financial goals and what they look like to you," said McNutt.
"So is it purchasing a new house? Retirement? Child's education? And what do those look like to you personally?
"It could be a simple plan that you could do yourself. Or maybe you have to seek advice from a professional," she said.
2. Be truthful about your current situation
McNutt said people tend to feel guilt about their finances if they're not where they think they should be.
"Maybe people have gotten themselves into more debt than what they had expected, and it now feels overwhelming or unmanageable. Or they're not saving as much as they think they should," she said.
Don't be so hard on yourself, said McNutt.
"Rather than beat yourself up, I think it's, you know, stepping back, looking at where you are, being really truthful about where you are."
3. Start with small steps
"It doesn't have to be a lofty goal. It can be little steps," said McNutt.
She suggested saving as much as $50 a month in a pre-authorized contribution that goes right out of your paycheck into an investment or savings account.
"So it becomes a fixed cost rather than something that you know you have to consciously make a decision to do," she said.
"If you take it in bite-sized chunks and you set realistic goals and realistic timelines, it seems more achievable."
4. Stay focused
"It's really easy to lose focus when your financial goals are decades from today," said McNutt.
Setting smaller goals like putting a certain amount into savings by the end of the year can keep you on track, she said.
"It's really important to remember that the decisions you make today have a really large effect on your goals in the future."
5. Remember, your plan can change
McNutt recommends meeting with your financial advisor annually, if you have one, to see if your goals have stayed the same and how you're doing at meeting them.
"Another time that you should do it is big life events. Through the birth of a child, retirement, the death of a spouse. Those kind of life events should be reassessed with your plan too."