personal finance

Personal Finance: Why Review Your Finances

  • By Bonnie Hooley, LIT

There is a Chinese proverb, ‘The best time to plant a tree was 20 years ago, but the second-best time is now’. And ‘now’ is the perfect time to learn more about finances and the impact they have on your life. Here are a few of the most important things to remember.

1. Financial goals are a must.

Financial goals prepare you for future life events, like college, retirement, and more. Financial goals can help you prioritize your spending each month. Goals should be for needs and wants. A well planned financial goal can help reach that dream, like a special vacation.

Start with some short term goals. These keep you motivated because you will reap benefits sooner. You also need medium term goals as well — things like a vacation or new furniture. Then there are the long term goals — buying a house or a car, or the real big one — having enough money to retire.

It has been said that setting goals is one of the secrets to a fulfilled life. Without a vision, the people perish. Financial goals are part of that vision, whether personal or business.

2. Budgeting puts you in control.

There are huge misconceptions about budgeting. Most think it tedious or consider it drudgery. The truth is that budgeting provides both peace of mind and financial health. The budget helps you see exactly where your money is going each month. It also assists in meeting your goals. It must include savings for unexpected expenses. Budgeting ensures you are spending your money thoughtfully rather than thoughtlessly. Ensuring you are funding the things that matter to you.

A good budget must be flexible, not cast in stone. Things change — income increases or decreases, new priorities emerge. Any change in your financial situation should result in budget adjustments. If you don’t, you will find your budget is no longer a helpful tool accomplishing all the benefits it was designed to provide.

3. Staying organized is easier than you may think.

If you receive a phone call from your cell phone provider saying they didn’t get your payment and need your confirmation number, would you be able to find it fairly quickly? It’s easy to let your financial statements, receipts, and other documents get unorganized, but it’s just as easy to keep them organized.

Keep paper documents in files, or scan them and keep them on a jump drive or specific folders on your computer. If you have confirmation numbers or statements emailed to you, create an email folder and move them into that folder. See? Easy.

Part of being organized includes balancing your bank accounts monthly with your personal accounts. This process lets you check to make sure you haven’t missed any expenditures, and lets you check that the bank has not made any errors either. Yes, the bank makes errors.
It’s quite easy to review if you do it monthly while everything is still fresh in your mind. If you use credit cards, it is essential that you check your statement each month, in order to catch fraud quickly.

4. Keep track of your money.

The key to maintaining your budget is tracking and monitoring your expenditures and income. There are so many tools to assist this process. For items purchased on debit, review your debit expenses, and allocate them to the appropriate budget categories. For cash expenses, get in the habit of keeping receipts or jotting down amounts spent. By allocating the expenses to the correct budget categories, you can track your progress and adjust before you get off track. Tracking shows you whether you are staying on budget or not.

Surprise fees can throw even the best budgets off course. Know what your bank and other financial institutions charge and account for it in your spending plan. These fees can add up fast. If you’re spending too much, shop around for other services that cost less. While it may seem inconvenient, it’s better than throwing those hard-earned dollars away every month.

5. Know where to get help.

You may notice your financial situation is more than you can handle, but you may not know where to turn for help. There are a number of places you can go to get help with money problems. A Licensed Insolvency Trustee (LIT) is the most experienced and best-educated professional in this field in Canada. They can offer a wide variety of assistance from advice on better budgeting, reorganization, or a consolidation loan, to a Consumer Proposal or Bankruptcy.

An LIT will review your financial situation with you and explain all of the options available to you. The sooner you get help, the more options there will be. Once your situation is out of control, your options are limited. It may be that only a Consumer Proposal or Bankruptcy will solve the problem at that point.

Both of these legislative options have built-in protection from your creditors. The legally binding, “Stay of Proceedings” stops creditors from continuing any collection practice. This includes protection from garnishment of wages or bank accounts. In Canada, the only professionals legally authorized to administer Consumer Proposals or Bankruptcies are Licensed Insolvency Trustees.

There is no better time than the present to learn more about how to handle your finances. By learning as much as you can about money, you can make sure your finances stay in shape. Give LCTaylor, Licensed Insolvency Trustee, a call today to set up your free consultation.

Bonnie Hooley, LIT

Bonnie has worked in the insolvency field since 1980. She is a graduate of the University of Manitoba, with a degree in Social Work. In 1999 she attained her license as a Licensed Insolvency Trustee. Bonnie has her Foundation Studies in Accounting from the Certified General Accountants (CGA). She is Read More Bonnie has worked in the insolvency field since 1980. She is a graduate of the University of Manitoba, with a degree in Social Work. In 1999 she attained her license as a Licensed Insolvency Trustee. Bonnie has her Foundation Studies in Accounting from the Certified General Accountants (CGA). She is a member of the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) and Past President of the Manitoba Association of Insolvency and Restructuring Professionals (MAIRP).Bonnie has served on various boards within her community. Her hobby is quilting, her passion is Christ. Close


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