5 Ways to Recharge Your Financial Goals in 2024
I have been in the financial industry for many years, but this year is special because it marks the fifth year since I founded my financial planning practice, Glory Gray Wealth Solutions.
I started this company because I wanted to be a true financial partner to my clients. That means providing advice that puts their needs first, always. I have no large corporation to answer to. I have no sales quotas. I work with fewer than 100 clients, so I have the honour of really getting to know my clients and what’s important to them. My time is devoted to their care.
For example, when the pandemic came and markets dropped suddenly, people were scared. During that time, all I had to worry about was caring for my clients. I didn’t have to waste time on corporate politics. I just listened and did the best I could for each individual.
In return, our clients have been loyal. They like the advice and the service they receive and they refer others to us so we can help them too. There’s no greater compliment.
Each year, I like to begin by talking about goals. And specifically about you and your financial goals. Have you set them? Are you making progress? Do you have a plan?
Let's dive deep into 5 ways to recharge your financial goals this year.
What’s Inside?
Table of Contents
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Let’s talk about you and your goals. Here are 5 ways to recharge your financial goals this year.
One: Sort your Goals
What financial goals did you set for yourself last year? Which ones did you achieve and which are you still working on? Which ones do you need to work on first?
Eliminate Financial Goals That Are Not Working For You
First, let’s eliminate. What goals no longer serve you? Life changes every year. Our goals do too. Let it go if it’s not going to make your life better.
Look at the goals you do want to continue to work on and write them down.
Identify New Financial Goals
Next, write down any new goals you have. If you have general, bigger goals, I believe in breaking them down into smaller, specific goals.
For example, if you have a goal to retire at the age of 60, you can write that down. But also write down a specific goal that provides a smaller step to get there.
For example, you could add the two smaller goals of one: “Have my financial advisor figure out how much money I’ll need to retire at 60” and two: “automatically contribute $250 per month to my RRSP.”
Rank Your Financial Goals
Next, put the goals in order of importance or in the order you need to tackle them on the calendar, whichever makes more sense.
Years ago, I learned the trick of calendering in each of my goals. Instead of adding a goal to a to-do list, I decide what month or week or even day I will take the first step to achieving that goal.
Sometimes a goal will have a specific deadline, like filing my taxes. If I know it will take two hours on four Saturdays to finish everything, I work backwards and block out the time needed on four different Saturdays in order to complete them on time.
The advantage of that is I no longer have to even think about that goal until I’ve scheduled the time to think about it. It frees up time to concentrate on other goals.
Identify The Financial Tools You Need
If you achieved one goal and not another, did you apply a different method of achieving the one goal that worked better than another method?
For example, did you achieve the goal in which you had an accountability partner, but not the one in which you were left on your own?
If the key to lifelong physical fitness is finding an activity you enjoy enough to keep repeating it–and getting the right equipment to help you get better at it– give yourself the tools to help you succeed financially. Find budgeting software you like that automatically calculates everything for you. If you’re a paper person, find some beautiful papers or journals where you can add up your expenses. Before you sit down to do your weekly or monthly budgets, have a favourite tea cup and hot beverage that you reserve only for this time. I’m serious! These little things can add up to you not dreading working on your important financial goals. You will be dealing with financial matters throughout your life, you may as well find ways to enjoy the work.
Find a Financial Planner that Fits Your Style
And of course, find a financial planner who you trust and feel comfortable with. You should walk out of your meetings with them feeling accomplished and empowered.
Two: Figure Out Where Will the Money Will Come From
Once you’ve determined your financial priorities for 2024, you’ll want to know how much money you have available to put toward these goals. When I’m working with my clients on their annual financial update, we consider one-time expenses, such as a new roof or a trip to Hawaii. Where should that money come from, and how will that spending change their future savings goals? Is everything still on track?
Will you need to add a part time job this year to make your goals work? If you’re retired, do you know what investment withdrawals will provide the best tax efficient income for the current year?
Three: Tend to Your Emergency Fund
37% of respondents In a 2021 FP Canada survey know that having an emergency fund can reduce stress. Still, only 22% had taken action to create one. An emergency fund can provide a financial cushion if you lose your job or need to take time off. It can also help you avoid the need to sell investments in a down market if you suddenly need cash.
A general rule is to keep three to six months’ worth of living expenses in a safe, flexible account, such as a high-interest savings account.
Four: Consider Paying Down Your Debts Faster
If you’re feeling overwhelmed with debt, you can attack it a few ways. You can use the snowball method or you can use the avalanche method.
How to Pay Off Debt with the Debt Snowball Method
With the debt snowball method, you write down all the people or companies you owe, like, Visa card, student loan, Uncle Jim, etc. and next to the name, you write down how much money you owe them.
Then, sort that list in order of the smallest amount of money you owe to the largest amount of money you owe.
Add up all the minimum payments you must pay and decide how much extra you can pay towards paying off your debt. Let’s say you want to pay $100 more each month towards paying off your debt.
Then, you start by putting that extra $100 towards paying the smallest amount first. That’s right, the smallest amount, not the largest. This way you are creating a snowball, balling up the smallest balances you owe, paying them off completely, then start to put that extra money towards paying off the larger balances until your debt snowball is completely paid off.
The advantage to this method is you can get past that feeling of being overwhelmed because you owe so many people money. You may even get rid of an entire debt every month for the first few months.
How to Pay Off Debt with the Debt Avalanche Method
The second method is the avalanche method. In the debt avalanche method, you pay your debts off from highest interest rate to lowest interest rate, regardless of how much you owe to each company. So, if your credit card charges you 20% annually and your student loan charges you 10% annually, you would take that $100 extra each month we talked about earlier and use it to pay extra to the credit card that charges 20%. Even if you owe more money on the student loan.
Which Method is Best - the Debt Snowball or the Debt Avalanche?
From a pure mathematical perspective, you will pay less money in interest and likely pay off the entire debt faster using the avalanche method.
However, the difference is really negligible. I think it’s better to just pick the method that appeals to you, the one you’ll stick with and just do it.
The most important thing is, once you pay off credit card debt, never ever spend more on a credit card than you can pay off every month. Credit cards charge 19.99% right now in Canada. I’ve seen money that people have saved for their entire lives whittle down to nothing in a few short years because they had to spend so much of it just paying back the credit card.
Five: Rebalance Your Portfolio
Whether you’re listening to this podcast after a year where the markets were down or up, once a year is a good time to look at your investment portfolio and determine if and how it needs to be rebalanced.
Remember, the best way to grow your investments without a lot of stress is to not worry about finding that perfect needle in a haystack, it’s about simply owning the haystack. You want to own a little of many different types of investments.
New Service - Your Personal CFO
There have been many changes in the financial industry in the past five years. Technology is allowing us to help more people. One of the trends I’m excited about is the interest that people under 40 years of age are showing in learning how to manage their finances. Information wasn’t as widely available for other generations. Now, we have more people than ever starting to save at a young age. Think about how much farther along they’ll be toward financial freedom in their later years.
But that doesn’t mean they no longer need the help and guidance of a financial planner. They still need help with tax planning and holistic financial planning.
That desire to help everyone who needs financial help but wants to manage their own investments led us to our new financial planning subscription service. It’s called “Your Personal CFO.” Think of it as “Netflix” for financial planning.
For a monthly subscription fee and an initial deposit, clients receive a complete, comprehensive financial plan and ongoing, on-demand financial planning advice. Everything except for daily investment management.
Anytime a client has a decision to make in their lives, and that decision has a dollar sign attached to it, they can call me and receive my best analysis and advice.
The idea is simple. You pay for a personal trainer for your physical well-being. Being overwhelmed about money is one of the greatest health stressors for Canadians. Why not pay for a personal trainer for your financial well-being? That’s what I want to be to you. Your personal trainer for financial fitness. If you’d like to learn more, you can go to our website, GloryGray.com.
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