Many of the most important financial habits must be built — and maintained — over the long-term.
For those struggling to improve their financial future, it’s easy to get mired in small problems, ultimately giving in to frustration. That’s understandable, but being savvy with finance demands a prolonged commitment.
That includes saving, investing and cutting back on spending, according to Ed Rempel, a fee-for-service financial planner, popular blogger, and tax accountant. Those aren’t short-term goals with a single step, Rempel says, but rather lifelong habits that must be continually improved.
This means repeatedly setting new goals, like what you could do within the next 12 months. Here are five simple financial tasks that Ed Rempel suggests you tackle in 2023. More than likely, they will help pay dividends for years to come.
Track Spending For One Month
This particular task seems basic, but it’s key to figuring out where your money is going and how you might better allocate it.
As you’re logging expenses, try to categorize them in a way that makes sense for you (those categories could include bills, food, transportation, eating out, entertainment, etc). Then, at the end of the month, calculate the total you’ve spent in each of your spending categories. This will help you decide where to cut back on spending, and where you should direct more money (like a savings account).
Once you understand where you are spending your money, you can think about whether this is where you really want to be spending it.
Ensure Privacy And Online Security
With countless data breaches and financial scams transpiring on a near-daily basis, it’s very important to proactively protect your financial and personal data. There are a number of strategies for doing this, but some of the most basic include:
- Setting alerts on your bank accounts and your credit cards to monitor suspicious activity.
- Routinely checking your financial accounts and credit report for fraud.
- Using unique passwords for your financial accounts keep a password manager.
- Not trusting anyone – whether that’s via the phone, email, or text – claiming to be from a bank, brokerage or other financial government institution.
- Freezing your credit reports if you will not need to access them in the short term, and opting for a credit monitoring service instead.
Nothing is guaranteed to keep you 100 per cent secure, but making it even slightly more difficult for scammers will reduce the chances of losing money. And remember, securing your finances and personal data isn’t something you do only once.
“Financial literacy is something that takes ongoing education throughout your entire life, it isn’t a one-and-done,” said Rempel. “Keep yourself up to date on the newest scams, investments, and financial education to make sure you’re in the loop and on track. Again, one of the most important aspects of this is working with financial professionals to make sure you’re getting the best information out there. Take the time to create your financial plan and make sure you’re up to date.”
Improve Personal Savings Rate
Your personal savings rate is the amount of your disposable income you don’t spend in a given time frame. You can determine it for the following year using these steps:
- Calculate your income for the year
- Calculate your savings for the year
- Divide your savings by your income
- Multiply by 100 for a percentage
That means if you take home an average of $3,000 per month and save $300 between retirement, your savings account and other funds, your personal savings rate is 10 per cent.
Remember, your savings should include any contributions to your savings account, retirement accounts, etc., except money allocated for short term spending.
Have Better Conversations
If you have a partner, schedule time to talk through your shared financial goals, concerns, and strategies.
Being open and honest about money can bring you closer together, and, ideally, prevent anger or frustration around your shared finances. Also, talking with a trusted friend or coworker — especially one who knows a bit more about money than you do — can be helpful.
However, few conversations will be more helpful than those with a fee-for-service financial planner like Ed Rempel. Reviews from his customers agree.
“I paid for two financial plans with two other fee-for-service financial planners and still didn’t know what to do,” said one review of Rempel, J.G., from Toronto, Ontario. “Ed took the time to work through various life options with me. Now with my financial plan from Ed, I know what to do.”
Hire A Financial Planner
Rempel provides many free financial insights on his website, www.edrempel.com . There, you can also find Ed Rempel’s reviews. With Ed Rempel, reviews of his services can help you decide if he’s the right fit for your needs.
“My wife and I have been clients of Ed’s since 2009,” said one reviewer, D.F. from Toronto, Ontario. “In this short time, we are well on track to our retirement goals while maintaining a comfortable living in the present. The peace of mind from knowing our financial future is secure if fantastic. When we have questions about things from car leases to planning for a big vacation, Ed and his team are always available to answer promptly. Couldn’t be happier!”
According to Ed Rempel reviews, many of his clients say it’s not too late to get control of your financial future. But the sooner you do it, the better, Rempel added.
