Four Money New Year’s Resolutions to Set for 2020
Have you started thinking about your New Year’s Resolutions for 2020? Besides fitness and career aspirations, a common theme of New Year’s Resolutions is money. Let’s look at four New Year’s Resolutions to strive towards in 2020.
Pay off High-Interest Debt
Do you have any high-interest debt? You’re not alone. Many of us overspend on the holidays. You can set yourself all sorts of ambitious financial goals in 2020 but starting the year in debt can really set you back. That’s why it’s a good idea to set yourself the goal of getting your high-interest debt paid off as quickly as possible so you can focus on other goals.
High interest comes in many shapes and sizes, most commonly credit card, payday loans and the so-called “don’t pay a cent” retailer events.
If you have high-interest debt, aim to pay it off as quickly as possible. Figure out how much time you can realistically pay it off in and put a plan in place. By doing that, you can have your debt paid off, so you can focus on more important goals like …
Save an Emergency Fund
Once you have your debts paid off, you can focus on saving an emergency fund. An emergency fund, otherwise known as a rainy-day fund, is for those unforeseen expenses that come out of nowhere. Examples include car repairs, a new roof and orthodontics for your children.
By saving ahead of time for an emergency, you can avoid going into debt to pay for those costly one-time expenses. Financial experts recommend saving three to six months’ living expenses, but that’s a tall order for most Canadians. Instead aim to set aside $50 or $100 a month or whatever you can afford to until you build up an emergency fund that is sufficient to protect you the next time something comes up out of the blue.
Regularly put away money for Retirement
Unless you’re one of the fortunate few who have a gold-plated pension plan at work, you’ll have to put money aside for your own retirement. Saving for retirement can be tough, especially when you have so many regular financial obligations. That’s why it helps to start small.
Similar to saving for a financial emergency, instead of just putting money aside during the RRSP season, aim to regularly put money aside from each paycheque – $100, $150 or whatever you can afford. Before you know it, you’ll have a sizable nest egg to draw down during retirement.
Save towards my Child’s Education
We’ve saved the best for last. If you want to provide a brighter future for your child (you’re reading this blog, so chances are you do), then putting aside money for your child’s education is a good way to do so. When you contribute money to your child’s RESP, you get “free money” from the government. The government will top up your contributions by 20 percent. You’ll receive up to $500 in free government money each year towards your child’s education.
By regularly contributing to your child’s RESP, the savings can really add up, so your child isn’t burdened with a mountain of debt when she or he graduates from university.