If you want to make some changes to the way you manage your money then now would be the time to start planning. Here are some tips to help you out.
If one of your new year’s resolutions for 2012 would be to better manage your finances, then there are some ways that you can accomplish that. While everyone’s situation is different, here are some common ideas that many Canadians could benefit from in the New Year:
Get rid of high interest debt
Before you think about how to invest your money, you may want to think about finding ways to eliminate your high interest debt. There are some strategies that you can use, such as allocating a certain portion of your monthly income to paying back debts, working with creditors to lower your interest rates or consolidating your debts. Speaking with a financial advisor could be beneficial to many people when it comes to managing their debt load.
Consider investments that have tax benefits
There are some types of investments, such as tax free savings accounts and flow through shares issues by companies operating in the Canadian energy sector which could help you not only grow your money but also reduce your income tax payments, especially if you’re in one of the higher tax brackets. Do some research on these types of investments and see if any of them could be applicable to your situation.
Set up monthly automatic contributions to your investments
If you have an RRSP or a TFSA, setting up direct monthly contributions to them may be a good way to help you allocate some funds to be invested every month, without forgetting or being tempted to use your money for non-productive purchases. Many financial institutions will let you set up an automatic transfer each month to various kinds of investment products, such as high interest savings accounts. Depending on your financial situation, making automatic monthly contributions may be a good choice. If not, you should at least create a plan to see if you will have some money available to be invested every 3 or 4 months.
Get professional investment advice
One of the reasons many Canadians don’t invest any of their money is because they find investment products to be too confusing, or are afraid of losing their money after seeing the bad economic events that happened in the past few years. Working with a wealth management company can help you find out which types of investments might be right for your unique situation and how you can get started. A financial advisor can point out some investment types that carry relatively decent returns but come with no or very little risk to your capital. You also don’t need to have much money to invest either and many experts would be willing to work with clients that have just over a few thousand dollars available to invest.Tags: Finance, money