We all know time is a fixed resource we all have. However there is a way to increase the amount of time you have. No, not by sleeping less and not by messing with the Special Theory of Relativity and time travel.
Think about how much time it takes to do a routine task. What if you could reduce the amount of time it took to do that routine task and cut the time in half by being more efficient, or by using a tool or technology. You would have effectively doubled your time. The time resource hasn’t changed, but the act of being more efficient by organizing or using a tool/technology has effectively doubled your time (for the period of that task).
Take stock of what routine tasks take up time in your day and how can you perform those tasks more efficiently in order to “increase” your time. Think of all the things you could get done with just a little more time. Its definitely worth the effort.
What is a financial goal?
Typically these include things like:
- What is important to you financially?
- What age would you like to retire?
- What do you want to do when your retire and how much will it cost?
- How often would you like to vacation, and what will you do on vacations?
Then you can figure out, based on what your goals are and how much money will be needed to accomplish them, how much you’ll need to save or how much money you’ll need on hand.
There are many online calculators that can help with some of these calculations, but I recommend seeking out a financial adviser to help get a complete and clean results. My experience is, get a professional to help you set goals and understand their implications. It usually doesn’t cost any money for an evaluation, and the results of the analysis will require some action anyway - and a Certified Financial Planner (CFP) can help you implement the plan.
The first step in planning your finances is to figure our where you really are today.
One of the best ways to get started is to complete a Net Worth analysis for yourself. A Net Worth analysis is a snapshot of how much you are worth financially right now. To do this, you should list all of your assets and liabilities with their associated, realistic values.
Assets are anything that when turned into cash gives you some money. Common items are: your home, vehicle, bank accounts, retirement savings (401K/RRSP), investments.
Liabilities are things that take money away from you (anything you owe). Common items are: mortgage, loan, credit card debt, spousal/child support. More…
Retirement Savings
It’s so thrilling to see the assessment of how much of your hard earned money you’re going to get back from the government on your Tax Return. The question is what to do with the money?
Well I know what I want to do (a big shopping spree for house renovations, new computer, vacation, plus some other items on the wish list), but then I know that’s not really what I should do. More…
CalendarBudget is a great tool to plan your money. You can see what your account balance will be like at any given point in the future with ease. But, to plan well, you need to know what you are going to do, how you are going to save and invest your money, set goals and plan plan plan. To do this CNNMoney has a bunch of really great financial calculators to help you determine where you are with your $$$ and where you need to go. More…
There’s lots of people taking sides on this issue. Should I have a separate bank account from my spouse and divide up the financial responsibilities?
This question is best answered on an individual basis, as each person’s needs and situation are different. For my simple financial picture, this comes down to an issue of trust. Do I trust my spouse with the family finances (and does she trust me)? If trust is present, its certainly easier to manage bills, income, and the overall financial picture with 1 account. Without that level of trust, then perhaps separate accounts make sense. From my perspective, having a joint account is somewhat of a comment on the health of a marriage. Having a joint account also allows each partner to see where the money is going and can inquire if one person is spending more than what was agreed. Also - there are legal considerations if one of the joint account members die. If the account is not joint, the balance may be frozen until lawyers get through all the mumbo-jumbo of the will and survival rights. More…
I was excited to hear recently, that with my modest savings of $65,000, that I’ll have 1 million dollars in 36 years (without saving anything else). Thank you compound interest and the rule of 72!
For those needing a refresher on the rule of 72 (or if you’ve never heard of it), it goes like this. Take the interest rate you are getting on your savings (investment) and divide it into 72. The result is the number of years it takes for your money to double in size.
More…
I came across this video today which outlines the importance of saving for retirement. In Canada, a 401K is called an RRSP (Registered Retirement Savings Plan). Presumably other similar tax-sheltered savings plans exist in other countries.
http://youtube.com/watch?v=StL_Pa0Tqmg
Interesting article from Financial Times on a trend away from buying a house early in life due to increasing cost of housing.
This highlights the need for proper personal financial management, education and budgeting early in life. If you don’t have these basic skills coming out of college/university, it can be a real challenge.
This education is typically free, so you have to get it. Talk to any financial planner, the internet is filled with links about it. This blog outlines some points, but is in nowise complete. My personal favorite is Personal Finance for Dummies 
A great intro and straight to the point.
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