Optas Capital
Jan 10: BEST FROM THE BLOGOSPHERE
January 10, 2022![](https://i0.wp.com/www.savewithspp.com/wp-content/uploads/2014/01/185936832-blog-490x290.jpg?resize=490%2C290)
New year, new plan to fix your finances?
Writing for the GoBankingRates blog via Yahoo! Finance, Jennifer Taylor suggests that the start of 2022 is a great time to review your personal finances.
“The new year is here and you’re ready to make serious changes to your financial situation,” she writes. “Whether you’re buried in credit card debt, haven’t started saving for retirement or don’t currently have an emergency fund, you’re committed to turning things around in 2022,” the article continues.
She raises an interesting idea, courtesy of Ryan Klippel of Optas Capital – that your budget for this year should be focused on whether or not “you were cash flow positive or negative last year.”
If you were cash flow positive – meaning you had money left over after meeting all your obligations – “great, now set a savings goal for 2022” for the extra money, the article suggests.
If, on the other hand, you were cash flow negative – meaning you have more obligations than money – “spend the time to determine what expenses were luxuries versus necessities, and trim accordingly,” the article notes.
For those of us with debts to address, states Klippel in the article, “sometimes setting smaller goals to start is better than overly ambitious ones. For example, it is much more realistic and digestible to eliminate credit card debt for one card than five.”
The rest of the article offers tips on how to turn your personal financial ship of state around.
- Save more money: Even if you could save just 10 per cent of your salary per month – leaving you 90 per cent to spend – you’d have a full year’s salary in the bank after 10 years, the article suggests.
- Retirement savings: Pay your future self first, the article suggests, and make retirement savings a priority, even over saving for kids’ education. Often, people want to do more things in retirement than they have done in their working lives, so more retirement income is positive, the article adds.
- Don’t let money control your life: It’s easy to get into the cycle of living paycheque to paycheque, but the article advises that “gratification comes when you take control of your life and the power you get when you wake up and realize you have money in the bank.”
Other great ideas suggested in the article include building up your emergency fund, changing your spending habits (via reflecting on how you spend and having a plan to change your ways), and paying your credit card in full each month.
This last one is particularly good advice. There are a lot of us who can’t pay off credit card balances. That basically means we are “buying” things that we won’t pay for in full for years, all while getting charged double digit interest. Often, one ends up in a “pay the bank first” scenario, due to rising minimum payments on credit card balances. Turning this around so that you pay the thing off in full will mean you can bid a fond farewell to all that compounding interest – and create a new pool of cash that you can put away for your future retirement years.
As we start a new year, your financial planning should for sure focus on retirement savings. The Saskatchewan Pension Plan equips you with a do-it-yourself, end to end retirement system that takes your contributions, invests them, and turns that nest egg into future retirement income. You can even get a lifetime pension through SPP’s family of annuity options. Find out how SPP can help you pre-build a secure retirement!
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Written by Martin Biefer
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Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.