Five tips for a financially prepared new year

Five tips for a financially prepared new year

March 18, 2011

There’s something about a new year that calls for a fresh start and nudges us along the path of self-improvement.

For some, the start of another new year means that for the next few weeks, I’ll have a tough time finding an empty parking spot at the gym. By February, however, most of the new recruits will have vanished and the elliptical trainers will be mine once again.

I guess you could say I’m a bit skeptical about New Year’s resolutions. I never set them, so I never fail to live up to them. What I do believe in is good routines that last throughout the year. For that reason, I’ve made it a habit to review my financial responsibilities at least once a year – or sooner if I’ve experienced a major life change – to make sure I’m on track to meet my goals.

With that in mind, here are seven things you can do today to set yourself up to be more financially prepared and prosperous in 2011:

  1. Write down your financial goals

It’s hard to make financial decisions without having goals to guide you, and having a written financial plan can help you stick to those goals. “Like anything else, if it’s thought about, that’s a start. If you take some action on something, that’s better, but if it’s written down and you’re holding yourself accountable, it’s that one level further,” says financial adviser Ted Rechtshaffen. If you already have a plan, great, but goals change as you age and as your life changes, so you need to review them regularly.

  1. Organize your spending

A budget is a big part of financial planning and keeps you on track to meet your goals, so put your income and expenses on a spreadsheet and review it annually or whenever there’s a major change in your life. Track your expenses with free tools found at sites such as and

  1. Check your credit report

Your credit report is more than just a history of bill payments. It can provide you with an early warning signal that something is amiss. Financial expert Kelley Keehn recommends you get a free credit report at least twice a year from Equifax or TransUnion. “Even if you’re not concerned about your score, you’ll want to ensure that accounts that should have been closed were, nothing is on there that shouldn’t be, and to look at the inquiries on your report: Are there any [loans or credit cards] listed that you didn’t apply for? If so, that would be a tipoff that someone has stolen your identity,” Ms. Keehn says.

  1. Cut your fees

Once a year, pull out the statements from your mortgage, insurance, banking and credit card companies and spend some time researching whether you can get a better deal. It sounds time consuming, but it can be done fairly quickly using online tools and calculators. As for the Mortgage, The Mortgage Teacher has an easy “Ask a Question”. As for the Credit Cards The Financial Consumer Agency of Canada is a good place to help learn some tips with tools to crunch the numbers , bank fees and credit cards. And is a one-stop site for comparing premiums on home, auto, travel, health and life insurance.

  1. Do an investment checkup

You have to rebalance your portfolio regularly – at least once or twice a year, plus any time there’s a big movement in the markets, says Norman Raschkowan, chief North American investment strategist at Mackenzie Investments. This year has brought strong gains in many sectors, especially emerging markets, small-cap stocks and income trusts, so if you hold such investments and have left them on auto-pilot, your portfolio may no longer meet your risk-tolerance level. “It is a good time for people to revisit their asset mix in light of their own risk tolerance,” Mr. Raschkowan says. “Simply introducing that discipline into your investing philosophy can enhance returns and help to reduce risk.”

via: Thanks to Dianne Nice, Globe and Mail