How to set financial resolutions that succeed

The New Year is a time to reflect on the past and set new goals for most people. However, achieving your financial resolutions for the year may be easier said than done without a plan in place. Solid financial planning involves setting realistic and attainable goals.

These are some achievable goals that you can set for yourself in 2026 to help you reach financial stability:

1. Review your current income and debt situation

You need to understand where you are before you can plan where you want to go next. This involves reviewing your current income and debt situation to gain insight into your current financial situation. Asking yourself these 10 questions can help you build a solid foundation:

1. How many creditors do you have?
2. What is the nature of these creditors? For example, CRA debt, unsecured credit card debt, vehicle financing, etc.
3. How much do you owe to each creditor?
4. What is the minimum monthly statement balance for each debt?
5. What amount of your payment is going toward the principal outstanding balance, as opposed to interest charges?
6. What is your disposable income after paying your general living expenses?
7. Do you have enough disposable income available to pay all your creditors in a timely manner, instead of making payments over several years?
8. Can you consolidate your debts into one monthly payment? For example, will a financial institution approve you for a consolidated loan, and at what rate of interest?
9. Are you comfortable with the level of debt you are carrying?
10. Do you need to consider other options, such as a Consumer Proposal or Bankruptcy?

These questions may be difficult to face. However, it is important to gain a solid understanding of your current financial situation if you want to achieve financial stability.

2. Learn to pay yourself first

Once you have your debts under control, it is crucial to learn to pay yourself first before you pay everything else. Pay yourself an amount or percentage from each pay statement, even if the amount is small.

Deposit this amount into an investment account, such as a registered retirement savings plan (RRSP), tax-free savings account (TFSA), or a registered education savings plan (RESP) for your children. You will find that you will still be able to pay your general living expenses and be increasingly motivated to work towards reaching your financial goals.

3. Make a monthly budget

Update your budget on a monthly basis and compare your current month to the previous month to get a better understanding of how your money is being spent.

4. Track your spending

Keeping a monthly log of your expenses allows you to better understand where you are spending your money. This enables you to see the big picture and identify opportunities to reduce your expenses.

For example, groceries are one area where people spend a lot of money. Changing your spending habits through buying non-perishable food items in bulk, using coupons, or shopping at less expensive supermarkets can help free up additional expendable income. You can put this amount into your emergency savings or investment account.

5. Work with one credit card

Use only one credit care and ensure that you pay the full statement balance each month instead of the minimum required payment. This means the payment will go toward the principal amount as opposed to interest charges. You can deposit the amount you saved on interest charges into your investment account.

Take control of your financial future

Goals need to be SMART (Specific, Measurable, Attainable, Relevant, and Time-bound) for financial resolutions to work. The five steps above can help you gain a better understanding of your financial position so that you can set realistic goals to help you achieve financial stability in 2026.

If you are struggling with debt and financial stress, reach out to one of our Licensed Insolvency Trustees. We can help you understand all your debt relief options so you can choose the one that works best for your unique situation. Together, we can help you achieve a fresh financial start.