New Year, Same Goals for Wealth, Health and Wellness
This month we’re focused on mind, body and wallet wellness.
At the beginning of a new calendar year, we get a lot of clients, past, present and prospective, seeking our financial advice. January has become a popular time to seek financial health support. Common themes of the new year are health and wellness and we’re pleased that financial health is being considered as part of holistic wellness.
There are a few reasons why now is a good time to review your cash flow, financial risks and goals for the year ahead. When families get together over the holidays, there are often conversations about finances. Seeing aging parents and visiting childhood homes can put real estate, retirement, intergenerational wealth transfer and general financial planning onto the to-do list for the new year.
While we don’t have to file our individual taxes until the end of April, many people set earning and saving goals based on the calendar year. As of January 1st we have 60 days left to ensure we have topped off registered investment savings plans for the previous year and it’s a good time to check in with our monthly cash flow to ensure our other investment accounts like Tax Free Savings Accounts and emergency savings balances are where we want them. This is also the time of year many plan their holidays or decide on big purchases for the coming months. There’s never a bad time to do your financial planning but January is a great time to start fresh.
Planning for financial health and wellness
Our main objective is to ensure that our clients have the financial support in place to not only responsibly achieve their financial goals for the year but also to be ready for the unexpected. Is 2024 the year your roof needs replacing? Or the year you take a sudden leave from work? We plan for the unexpected and identify risks so that if roadblocks or detours come up, our clients are ready. Financial stability requires good communication. Communicating openly and honestly about money with your partner, your extended family and with your financial advisor will allow you to plan effectively.
In traditional corporate environments, the new year can also come with salary adjustments, raises and bonuses. Our advice is often to redirect these increases. If you’ve been living comfortably on your 2023 earnings, redirect your salary increase into a savings account. This could increase the budget for fun things like vacations, reduce outstanding debt, supplement a savings account for retirement or prepare for a capital purchase. Extra funds can grow your safety net for the unexpected or spontaneous.
Three tips to start saving
If part of your new year’s resolution is to save money, there are some simple ways to get started today.
- Automate: The most successful savings strategy is to automate the transactions. Setting up an automatic transfer off your paycheque each month into another account is a passive way to see savings grow with zero effort.
- Know your flow: In ongoing uncertain financial times, having a realistic understanding and tracking system of everything coming in and everything going out will keep you living within your means.
- Get Support: Sitting down with a financial expert to discuss your goals and cash flow will allow you to save and invest with confidence. Having a third party with a strong knowledge of taxation strategies, investment options and wealth management ensures you’re making the best decisions to achieve your goals while living true to your values.
Keeping a an eye on global changes
There’s no doubt we are in an uncertain financial climate in Canada. Last year, the prime rate rose from the previous low of 2.45% in March 2022 to the current bank prime rate of 7.2%. This puts the prime rate at its highest level in 22 years. Inflation and rising rates were felt widely in many countries. We expect this uncertainty to continue into 2024 and will be watching central bank policies around the world to see their impact on global finances.
60% of the world’s population will have the opportunity to vote in a political election this year. Governments in power have a strong effect on global finances which impacts us locally. This year, we predict that politics are going to play a bigger role in financial markets. With more than half of the world’s population potentially voting on their new government, there are interesting dynamics at play politically coming up this year. With change and instability comes uncertainty and increased caution. We’re watching closely so we can prepare ourselves, our business and our clients.
Slow and Steady Saving
Financial health is a lot like physical health. You can’t go for one jog and be fit enough to run a marathon, and in the same way you can’t make one deposit into a savings account and be stable enough to leave your job. Creating a strategy and consistently making progress throughout the year is the best way to succeed, in both savings and fitness! You may not see results for three, six or even twelve months but a consistent, disciplined approach will get results.
At Seaglass Wealth we’re not big new-year’s resolution makers. But if January feels like a good time for a client’s fresh start, we are here to support! We’ll work with you to figure out changes to your spending and saving that are sustainable. During this process we maintain our values first approach. As much as we want to see your savings and investments grow, we want you to enjoy the life you’re living today, with the comfort of knowing you can accommodate the unexpected, whether that’s an exciting opportunity or an unforeseen detour.
As we head into February, take a moment to reflect on the past before you look to the year ahead. What worked well for you financially? What took you off track? What were the successes and what can we do more of?
Wealth management and financial planning can be complicated. There are various confusing choices, rules, and strategies combined with speculation and government impact. Our advisors are licensed in BC, Alberta, Ontario and Nova Scotia. Get in touch today and let’s chat about making 2024 a great year for your wealth wellness.
We are looking forward to the opportunity to meet you! For more information, please feel free to reach out.
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