As 2020 disappears into our rear view mirror and 2021 is upon us once again it is time to think about our financial New Year's Resolutions. As always it is best not to be too ambitious with your financial plans for the new year or you might be unable to stick to them. Instead take a realistic look at your current financial situation and focus on quick and easy ways to manage personal finance tasks that will help you this year and in the future. Here are some things to consider:
Top up your Emergency Fund - Financial experts recommend setting money aside for emergencies but even so most of us do not have an emergency fund. Many people will have dipped into their emergency fund during 2020 so now is a good time to start rebuilding it if you are able to. You should aim to have enough to cover your expenses for 3 to 6 months should you lose your job, enough to cover unexpected vehicle repairs, house repairs or medical expenses.
Contribute to your RRSP - This is a good time to open a RRSP if you don't yet have one. If you regularly contribute perhaps you can increase your contribution in 2021 if you have enough room without over contributing.
Sign up for Automatic Bill Payments - This will help you to not miss payments on your bills. Include a minimum payment on your credit card which will avoid late payment fees. Consider an automatic payment to your savings account from each pay check, what you don't have you don't miss! It is usually easy to set up automatic payments on your bank's website.
Switch from a Bank that Charges Monthly fees to one with no Monthly Fees - There are many banks and credit unions out there that do not charge monthly fees for regular personal banking transactions. Switching your account could save you at least $100 a year and maybe more. If you don't want to change banks ask if your current one will waive your monthly fees.
Make Calls and Lower your Payments - It could be worth spending time calling your service providers especially for internet and cable to see if there is a way to reduce your monthly rates. You should also look into the interest rates that you are paying on your credit cards and think about changing to a card with lower fees or cash back. As most of us are not travelling at present it might be a good idea to get rid of your travel points credit card with it's high fees and change it to a regular card with a lower rate. You could also try and negotiate a lower rate with your credit card company.
Update your Beneficiaries - Have you reviewed your will lately? This is a good time to make updates to your beneficiaries or any other information as your circumstances may have changed.
Check your Credit Report - Make sure that your credit report does not contain any errors or charges relating to identity theft as your credit score will affect your ability to get loans or lower rates on your credit cards.
Change your Passwords - It's a new year and time to change those passwords especially for your bank account and credit cards. You should be doing this every three months but at least once a year will help to avoid identity theft.
Do a Subscription Audit - Take a look at your monthly subscriptions for streaming tv services, apps, news providers etc. How many of these do you actually use? If you have not used it for a while and don't intend to use it in the foreseeable future then deactivate it. You can always reactivate it later if you need to.
Tweak your Budget - Though setting a budget can be intimidating it will help you to keep track of your spending. If you are working from home and not spending money on Starbucks and lunches perhaps you could put that money into your savings account?
From an article by Mike Winters