Understanding the Financial Industry
3 minutes read
Happy New Year to you. And you. And you and you and you.
I don't know about you, but I LOVE January 1.
Why do you ask?
It's the first day of the year when there is not much else to do except set myself up for financial success for the year ahead.
Our finances are always changing. Every. Single. Day. And it's important to evolve and change along with our finances and ensure that we're adapting as our circumstances change.
Here are the top 3 things that I accomplished on January 1.
1. I updated my Net Worth Tracker. I love a good Net Worth tracker. It allows me to analyze and understand where all of my finances are, and how they've improved over the last year.
2. I filled out the Financial Freedom calculator. Every year, I fill out a calculator that determines how much I need to save for the year ahead in order to reach financial freedom. I also use the CRA retirement calculator, which helps me determine what kind of CPP and OAS I'll be receiving when I hit a certain age. You can find that calculator here. https://www.canada.ca/en/services/benefits/publicpensions/cpp/retirement-income-calculator.html. Once I've figured out my CPP and OAS income, then I can go back and fill in the rest. Easy peasy lemon squeezy. Once I have my Financial Freedom number, it's time for me to set up my financial plan.
3. Go through my budget and understand my cash flow for the year ahead. We all have financial goals. We also all have expenses. It doesn't matter if we work or not, at the end of the day, it costs money to live, and it's important that we understand our expenses on a monthly basis. Personally, this is a big year for me. I just bought a car, I'm going on a trip to Belize in March, and I'm getting married in August. There are a lot of expenses coming up, but I'm not worried. I have a solid understanding of my expenses for the year ahead, and I will have to change my lifestyle for a few months so I can accommodate all of those upcoming expenses. I track every single dollar that I have coming in, and every dollar coming out. I know that most people brush this idea of a budget aside, but what better way to manage your finances than to track it?
So before you spend another day heading into work, I suggest sitting down and doing some of the above. It will not only help relieve some of the financial stress that you may be facing, but it will help put your finances into perspective and will allow you to focus on what's a priority.
Greetings from Wiesbaden, Germany! I've been here for the past week and a half for my Oma's 80th birthday. This is me stuffing my face with the Thanksgiving dinner that we prepared for our German family. Do you know how hard it is to find a Turkey in this country? It's not easy - let me tell you!
Travelling is an important part of my life, and it’s something that I try to do at least once a year. However, it can get expensive, and it’s something that definitely needs to be budgeted for. I’ve met lots of travellers who end up stressing during or after a trip because they’ve dug themselves so deep into debt.One of my personal goals is to help others create and manage their personal finances and budget for short or long-term goals. So, this post is a list of some handy tips to ensure that you have financially stress free travels.
1. Plan and research:
It’s always smart to have some kind of idea as to where you want to travel to so you can start looking into flights and accommodation. This will be the most expensive part of your travels. Sites like Google Flights, Kayak, Momondo, and Cheapoair will scrounge the Internet for the cheapest flights possible. And with so many great accommodation websites like Airbnb, Couchsurfing, Booking.com, Agoda, Priceline, and Hostelworld, it’s always great to give yourself enough time to find the cheapest nights available in parts of the city you want to explore. It’ll also be helpful to read some travel bloggers who have recently travelled to your destination as they often discuss how much money they spent. On top of your flight and accommodation, you’ll also want to budget enough money for your food and drink, daily excursions, transportation, and a small emergency fund in case anything goes wrong.
2. Budget: Just like your food, clothes, rent/mortgage, car etc., travel should be a line item in your budget. If it’s something that you foresee doing in the near future, add it into your yearly budget and account for it from the get-go. That way you won’t be scrambling a few weeks/months before you leave, and you’ll have already had some money set aside.
3. Save, Save, Save: When I saved $20,000 for my trip to South America and Southeast Asia in 2015, I took 15% of my paycheques and put it into a high-interest savings account that I didn’t touch. If I had any money left over after all of my bills were paid and my fun was had, it went into a TFSA where I invested in Index Funds. These funds paid out a dividend and gave me between a 5-10% return for that particular year. It’s one thing to save, but investing your savings will help you make money even faster, getting you one step closer to take off.
4. Open a Separate Account: Once you have a rough idea as to how much money you’ll need, open up a separate bank account that’s out of sight, out of mind. A TFSA and/or high-interest savings account is great because it will accumulate interest faster than an everyday savings account. For those who don’t know the first thing about investing, Wealthsimple is a really great platform that makes saving and investing easy and effortless.
5. Be Flexible and Open: When I was in Brazil, I was complaining to this Irish girl that the flight from Chile to Thailand was $2300. She suggested that I try to be a little more flexible with my timing and not look for a direct flight, but rather create my own trip around the world and book different lags of the flight myself. At first, I was a little skeptical but she helped me research some different itineraries and I booked 3 separate flights. Although it took me 48 hours to reach my final destination, I ended up saving over $900. It’s definitely worth being flexible and having an open mind because you can find some really great deals if you just think outside of the box.
Conclusion? be smart with your money
For those of you who are as gung-ho about seeing the world as I am, be sure to work hard so you can play hard when on the road. The worst thing that could happen is that you start to travel and realize that you don’t have enough money to do the things that you want to do. This is a once in a lifetime opportunity for most. Make sure you’re smart with your money before you takeoff so you can leave your financial stresses on the runway. And as always, if you're planning a trip and need some personal finance guidance, please contact me!