Volume 2, Issue 5 August 2007    

 

Welcome to my new ‘Momentum Moments’! 

Create a budget – who, me?

I find that the very subject can send chills down people’s spine.
It is never a good feeling when the income doesn’t seem to cover the expenses. We don’t like to admit that because then we may have to batten down the hatches and forego that Starbucks latte. But in the long run, it is the wise thing to do.
A good exercise is to write everything down that you spend for a couple of months – do not worry about where it is going. Make up different categories such as housing costs, automobile, personal expenses, debt reduction and miscellaneous expenses.
When I ask clients to start tracking where the money goes every month – they can be surprised on how much just goes into ????. Sound familiar?
Now add up the numbers to see what you spend every month, and write that number down. Then write down your monthly net (after tax) income. Calculate the difference.

If your income is greater than your expenses, congratulations – now you can increase the amount you contribute to your RRSP or emergency fund every month without feeling pinched. If your expenses exceed your income, you need to look at ways to cut them back.
Look at the expenses you have written down and ask yourself: is that making my life better? Do I really need that? Is this getting me closer or farther away? Have I made myself a priority? Do I pay myself first?

“If you are working to build wealth so that some day you can stop working, that’s not going to happen if you don’t plan for it.”

 

Make your dreams come true!

“The best way you can approach the end of your life is to have done what you wanted to do, and live with however it turned out.”

Have you done what you wanted to do?
If not, what’s holding you back? For many of us, it’s a combination of time, money and family responsibilities. You may not be able to indulge in everything on your dream list in one lifetime, but despite the obstacles, you might still achieve one or two of them if you do more than just dream.

Make a list
I talk to my clients about making your dream list – what do you want to spend your time and money on?
Don’t limit yourself to what is practical or affordable – let your imagination have free rein. Maybe you’d like to own a Ferrari, buy a boat, or put an addition on your house. Or maybe you’re dreaming of a Caribbean cruise, a month in the south of France or a year off to backpack around Europe.
So as you approach the end of your life, which of these big dreams will be the one you really regret not pursuing or achieving?

Start saving
Start planning now to make that dream a reality. The best way to start is to save money in separate accounts for different goals.
Once you make the commitment to save, you don’t miss the money all that much – and then all of a sudden you’ve got the money you need. And because it’s earmarked for a specific purpose, you don’t feel guilty about taking it out of the family pot, so to speak.

If one of your savings plan is meant to achieve a relatively short-term goal, choose an investment account that offers liquidity and a respectable interest rate. If you have a longer time horizon then you will want to take advantage of higher returns by investing in the mutual fund markets. So go on, start dreaming and planning – the sooner you act, the sooner you can accomplish big things!

Tel: 250.755.4004
140A Commercial St, Nanaimo, BC  V9R 5G6
 
 
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