Spring is just around the corner: Setting financial goals for the year

A new year is often seen as a time of new beginnings. It can also be one of the most challenging times of the year. It’s the middle of winter, the holidays are over, everyone is back at work and school, and the holiday bills and credit card statements have all come due.

The bright side is, this can also be a great time to take stock of your financial situation and set new goals for the year. With spring coming up fast, it’s an opportunity to make a firm plan to deal with your debts so that by the time the next holidays come around, you can close out the year in a better financial position than you started. Just imagine the new financial goals you’ll be able to set next year.

Here are five tips to help you get started on this year’s journey to debt freedom.

1. Take a look at your actual numbers

Check out your current financial health. Review your income, assets, and more importantly, take a hard look at all of your debt. Figure out who you owe and how much. Mortgage, vehicle lease, unpaid bills, payday loans, and all of your credit card debt. Find out what the interest rates are for each and prioritize your debts based on their total amount and the interest rates.

If you’re in a situation where you have a lot of debt, this process can feel overwhelming. But the sooner you understand the true standing of your financial health, the sooner you can regain control of your finances and put yourself back on the journey to full financial freedom.

2. Make a budget

If you’ve never made a budget, now is the perfect time. If you’ve already done a budget — time to think about making a new one. Just look back at the rising prices throughout 2023. Everything is getting more expensive. Review your monthly spending on groceries, living expenses, streaming services, delivery services, and the rest of your Needs and Wants. And don’t forget to include irregular expenses such as vehicle or house maintenance, or School fees in September. Also, think about what may change over the new year – Is your mortgage renewing in 2024? It might have a higher interest rate, increasing your monthly mortgage payments.

Once you have a handle on all of your expenses, calculate all of your income and make a budget for each expense on a monthly basis for the entire year. If your expenses are more than your income, you’re going to have to make some decisions about how to cut back your overall expenses. Maybe drop a streaming service or two. But if you still have income left over after all your expenses are paid — then you’re in a great place for this next tip.

3. Come up with a debt repayment plan

Once you know your budget and know that you have enough income to cover all of your living expenses, take the rest and make a plan for paying down your debt. You’ve already reviewed your debt and prioritized what to pay first based on the amount and interest rate. Build it into your financial plan for the year with the goal of paying off as much debt as you can afford.

If you feel you can manage the debt that you have with your budget as is, consider the Avalanche or Snowball method of debt repayment. If you feel you don’t have enough in your budget to make any headway on the principal debt payments, or you feel anxious about the amount of debt that you have even if it may look manageable, consider talking to a Licensed Insolvency Professional (LIT) who will go over all of your debt relief solutions and help you make a plan to reach a debt free goal.

4. Remember, debt is not the end of the world

Looking at your total debt can be depressing, alarming, and it can create an extra layer of stress after a busy holiday season. Make sure you take care of your mental health. Take a minute to reflect on what getting rid of your debt would mean to you and your family. Get excited about it. Make a goal that is ‘fun.’ It could be something small like going to see a movie, or something larger in the future like that long-postponed vacation.

Financial wellness doesn’t happen overnight but by taking control and making meaningful and attainable goals to defeat your debt, you can use this year to get you even closer to a life of full financial freedom.

5. Talk to the right professionals

Everyone’s financial journey is different. It’s important to understand that you have options. Work with a Licensed Insolvency Trustee (LIT) to understand those options as you decide the best path forward. There is never any obligation or fee for an initial consultation. Be aware of companies charging upfront fees, claiming to be able to file a proposal without a LIT, or making promises to reduce a percentage of debt without reviewing your whole situation.

A Licensed Insolvency Trustee will guide you through the process, helping you realize your financial goals for the year. Maybe it’s time to file a Consumer Proposal. Maybe Bankruptcy makes the most sense for you. Or maybe they can help you come up with a great debt repayment plan. Make the most of your year and next year will feel even brighter.

Call or book an appointment with one of the qualified experts at MNP and together we will make a plan to defeat the debt Blues.