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Finance

One Week Closer to Your Dreams

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Well, the first week of 2023 is in the bag. Either you’re one week closer to your dreams or you’re not. No need to share your response with the class, but which one is it?

Personally, I don’t do New Year’s resolutions. Any day of the year is a great time to make beneficial changes to one’s life. January 1 doesn’t hold any special power when it comes to setting priorities for how you want to live the rest of your life. That said, I do use the sentiment of season as incentive set and re-assess the goals for my life. (Since this is a personal finance blog, I’ll only discuss my personal finance goals.)

Some of my financial goals are long-term, i.e. retiring ASAP, while others are in my near future, i.e. maximizing my RRSP contribution in May or June. I find that January of each year is a good time to figure out what goals are most important to me. This way, I can focus my spending in ways that get me closer to the life I want to live.

So far, and in no particular order, my goals for 2023 include:

  • paying cash for Christmas 2023 (no credit card hangover in January for me!)
  • contributing to my TFSA and RRSP
  • taking myself to the spa for my birthday in August
  • upgrading my iPhone
  • increasing my dividend cashflow by 10%
  • using my newly-creating slush fund (shout out to Bridget Casey of Money After Grad)
  • taking lunch to work more often than not
  • doing more meal prep so there’s less motivation to choose for fast food
  • maintaining my contributions to my non-registered account
  • beef up my emergency fund to account for inflation

These are the financial concerns that are currently most important to me. And since it’s my list, I’m the only one who gets to add, amend, or remove items. By the same token, I’m the person who has to fund them too.

How I Meet My Goals

Unsurprisingly, I’ll be using sinking funds for many of my goals. As I get paid, various chunks of money will be saved in various sinking funds until it’s time to spend the money. Most banks allow you to create nicknames for your various accounts. I love this feature! Nicknames are the perfect reminder of which priorities are being funded with my money. Should I ever need to withdraw money, then I know exactly which priority is being sacrificed for some other purpose.

Let’s use Christmas 2023 as an example. I get paid bi-weekly so I have 26 paycheques coming to me this year. My sinking fund will see contributions of $50 bi-weekly, which will give me $1300 to spend on Christmas in 12-months time. Now, if I think Christmas is going to cost more than that, then I can bump the amount up to $75 ($1950) or $100 ($2600) to cover my anticipated expenses. Thankfully, my family is nearby so I don’t have to cover huge transportation costs. We’re also not too big on gifts and prefer to focus on the food, playing with the kids, and playing board games. The lower amount of $1300 should be more than sufficient to cover the anticipated costs.

By starting to save for Christmas 2023 now, I won’t be scrambling for $1300 in 11 months time. I’ll have been saving throughout the year in small chunks. When the time comes, I can spend on gifts, food, and decorations without wondering where the money will come from to pay for everything. The money will have been tucked away just for this purpose. Easy-peasy-lemon-squeasy!

Automatic transfers take a good many money-decisions off my plate every year. They allow me to fund my priorities with the least amount of stress. I achieve my goals and get what I want by following this simple 3-step formula:

  1. My employer deposits money into my account on payday.
  2. Automatic transfers whisk a good chunk of it away to fund the things that are most important to me.
  3. Whatever’s leftover is spent on the day-to-day expenses of living: shelter, groceries, utility bills, entertainment, and other little nice-to-haves.

I never have to ask myself if I’m going to transfer money from my chequing account to my various savings and investment accounts. Thanks to the power of automation, the money is siphoned away before I have a chance to spend it.

51 Weeks Left

The first week of 2023 is in the history books. Hope it was a good one for you and that you’re one step closer to living your dreams. And if you didn’t get any closer to your dreams, then take a few minutes to figure out why. Ask yourself the following questions:

  • How are you going to spend your money over the 51 weeks left in 2023?
  • Are there any financial obstacles that are preventing you from getting what you want?
  • If yes, what would it take to remove them?
  • Are you willing to bear the consequences of removing money impediments from your life?

I get it. Change is hard, and I’m not terribly fond of it either. Still, life has taught me that sometimes changes have to be made in order to get what I want. Other people will always have opinions about how I’ve chosen, or not chosen, to spend my money. Guess what? They’ll sleep just fine with their opinions, but I’m the one who has to live with my choices. I’ll consider their opinions, before I do what I think is best for me.

You’re in the same boat. My opinions on this blog are mine. You know your financial situation way better than I do so you have to make choices based on the facts of your life. After all, you’re the one who is going to be saddled with the consequences of every choice you make. Life is a series of choices, after all.

When it comes to your money, I’m suggesting that you be the one to choose what happens with it. Don’t let anyone else spend it for you. Never let anyone else put you into debt! No one else knows what is most important to you. At the end of the day, your choices with money will affect every aspect of your life. This is why you should put in the effort to articulate what you want most then craft a spending plan to achieve it.

This is the very best way for you to move closer to your dreams, and to seeing them come true.

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