Start the New Year with a Financial Wellness Check

As the new year begins, it’s a perfect time to reassess your personal finances. This annual review can help you understand your financial health, set new goals, and make necessary adjustments to ensure you’re on track to meet your wealth planning objectives. Here’s a guide to help you get started and understand how an investment advisor can be instrumental in this process.

1. Review Your Financial Situation
   Start by taking a comprehensive look at your current situation, including:
   • Income and expenses: List all sources of income and track your monthly expenses. Categorize your spending to identify areas where you can cut back.
   • Debt: Make a list of all your debts, including credit cards, student loans, and mortgages. Note the interest rates and minimum payments for each.
   • Savings and investments: Review your savings accounts, retirement funds, and any other investments. Assess their performance and determine if they align with your goals.
   • Net worth: Calculate your net worth by subtracting your total liabilities from your total assets. This gives you a snapshot of your financial health.
2. Set Financial Goals
   Once you have a clear picture of your finances, set measurable, achievable, relevant, and time-bound goals. These might include:
   • Short-term goals: Building an emergency fund, paying off high-interest debt, or saving for a vacation.
   • Medium-term goals: Saving for a down payment on a house, funding education, or purchasing a car.
   • Long-term goals: Retirement planning, investing for future wealth, or estate planning.
3. Create a Budget
   A budget is a crucial tool for managing your finances. It helps you allocate your income towards expenses, savings, and debt repayment. Use the 50/30/20 rule as a guideline:
   • 50% for needs: Essentials like housing, utilities, groceries, and transportation.
   • 30% for needs: Non-essential expenses like dining out, entertainment, and hobbies.
   • 20% for savings and debt repayment: Building your emergency fund, retirement savings, and paying off debt.
4. Monitor and Adjust
   Regularly monitor your budget and financial progress. Life changes, such as a new job, marriage, or the birth of a child, can impact your finances. Be prepared to adjust your budget and goals as needed.

How an Investment Advisor Can Help
An advisor can provide valuable guidance and support in managing your finances by way of:

• Professional advice
  Investment advisors have the experience and training to help you make informed decisions. They can provide insights into investment opportunities, tax strategies, and retirement planning. Their knowledge can help you navigate complex financial situations and avoid common pitfalls.
• Personalized Plan
  An advisor can create a plan tailored to your unique goals and circumstances. This plan will outline specific steps to achieve your objectives, such as saving for retirement, buying a home, or funding your children’s education.
• Accountability and Discipline
  Working with an advisor can help you stay accountable to your financial goals. They can provide regular check-ins and updates, ensuring you remain on track. This accountability can be especially helpful in maintaining discipline with your spending and saving habits.
• Stress Reduction
  Managing finances can be stressful, especially when dealing with debt or planning for the future. An advisor can alleviate some of this stress by providing clarity and direction. They can help you prioritize your goals and develop a clear action plan.
• Long-Term Relationship
  Building a long-term relationship with an advisor can be beneficial as your financial needs evolve. They can adjust your wealth plan as your life circumstances change, ensuring your strategy remains aligned with your goals.

Starting the new year with a reassessment of your personal finances is a proactive step towards achieving financial stability and success. By reviewing your financial situation, setting goals, creating a budget, and monitoring your progress, you can take control of your financial future. Enlisting the help of an iA Private Wealth advisor can provide skillful guidance, personalized planning, and the support needed to stay on track. Make this year the year you take charge of your finances and work towards a secure and prosperous future.

This article is a general discussion of certain issues intended as general information only and should not be relied upon as tax, legal or investment advice. Please obtain independent professional advice, in the context of your particular circumstances. iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.