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Five New Year's savings resolutions for 2019

young people having a great time

Resolutions are always a great way to ring in the New Year. Cutting out carbs, joining a gym, learning a new hobby – they’re all promises we make to improve our health and happiness. But the new year is also a prime time to plan a healthy financial future. The best part: it won’t require giving up sweets.

Here are 5 resolutions to make before the ball drops on January 1st.

1. Tackle credit card debt

With more than 75 million VISA and Mastercard credit cards currently in circulation in Canada, it’s no wonder Canadians have $1.68 of debt for every dollar of income, according to Statistics Canada. The good news is ‘tis the season for cash gifts and workplace bonuses. Rather than spend frivolously, use these funds to pay down your high-interest credit cards, even if it’s only to pay off your minimum balance. And because credit cards will always be a part of life, look for ones that offer cash-back rewards and other privileges.

Find out how you can reap rewards and boost savings with a Meridian VISA Platinum Cash Back Card.

2. Invest (more) in the future

That countdown you’re hearing isn’t just for the New Year. The RRSP contribution deadline is also fast approaching. According to Insider Secrets: Thousands of Life-Improving, Money-Saving Tips from Industry Experts, from the editors of Reader’s Digest, your retirement savings should be about 20 times what you want your annual income to be. For example, if you think you’ll need about $80,000 a year to live on when you retire, you’ll need $1.6 million in retirement savings. Not sure if you can afford to make an RRSP contribution this year? Speak to a representative at your financial institution. There are plenty of flexible loan options available to help grow your nest egg.

3. Get aggressive with your mortgage

With lending rates on the rise, Canadians could be in for “payment shock” when it comes time to renew their mortgage, according to a recent report from credit ratings agency DBRS. Fortunately, resolving to make extra payments toward your mortgage could lessen the impact. Even one or two extra payments each year will not only reduce the time and amount it will take to pay off your home, but you’ll minimize the overall amount of interest you pay. Switching to weekly or bi-weekly payments at the start of the year can also take several years off your mortgage amortization.

4. Assess your financial reality - honestly

Are you in a healthy relationship? Are you moving along the right career path? Year-end is often a time for reflection. Your finances are no exception. Now’s the time to take an honest look at your spending habits. The Government of Canada’s Office of Consumer Affairs (OCA) offers warning signs that tell you when you are too far in debt. These signs include:

-Frequently late to pay bills
-Regularly bounce cheques
-Regularly borrow money from friends and family
-Take an advance from one credit card to pay the minimum amount on another card
-Receive calls from a collection agency

If you recognize these warning signs, now’s the time to make some necessary changes. Contact creditors and ask them to lower your monthly payments. Work with your mortgage lender to establish more favourable terms. And meet with a financial institution representative to discuss ways to consolidate your debt. After all, 64% of people say a financial planner is a trusted source of advice, according to the Financial Planning Standards Council.

5. Fine-tune your budget

Start the new year off right with a carefully crafted budget. First, assess any upcoming expenses. Will you be returning to college? Or do you plan on retiring? Whatever your plan, make sure your budget is based on current objectives. Next, examine how day-to-day living expenses, such as groceries and transportation, are impacting your debt load. Determine areas to save, and look for ways to increase your annual income. Finally, create a pre-authorized contribution savings plan, in which funds are automatically debited from your account at a pre-determined time, to take advantage of dollar-cost averaging and to avoid having to scramble when unexpected expenses arise.

For more financial tips and advice, contact a Meridian branch to book an appointment with an Advisor today.