Yup, it’s half way through 2009 and how goes your financial plan for this year?

For me my plan of having a job by now, has not come to fruition, but I am still working hard at making this happen.

This week’s posts will discuss what areas and ideas you maybe should be thinking about for your personal finance plan and what you might need to tweak, change, add or forget about in your Yearly Personal Finance plan.

Do You Have a Plan?

You are now saying, “Wait a minute, I don’t even have a financial plan for this year?”, that’s a problem, but not insurmountable that is for sure.

So many people a yearly financial plan has to be complicated, over-thought or grandiose, but that is really not the case (if you don’t want it to be).  A personal finance plan can be as simple as you want it to be, and is simply based on the goals you want to hit this year (financially), no more, no less.

Simple Plan

A simple plan for a year might be:

• Cut your credit card debt by 30% (if you have credit card debt, if you don’t then you have achieved this goal, give yourself a pat on the back). If 30% is way too much for you, then either:
  • You have one hell of a credit card debt and you need to see someone about this.
  • You need to adjust your lifestyle, because this is do-able if your credit card debt is less than $10,000
• Pay off 15% of your University loans (adjust as you see fit).
• Open an RRSP account and put in at least $1000 for the half year. Make sure it is with an investment firm and not with an Insurance Company or a Mutual Fund firm.
• Create an emergency account that you will deposit $100 a month into (open a TFSA if possible for this as well).
• See how much you pay in bank fees monthly and lowering them or cut them to Zero, if possible (see PC Financial or talk to your bank about lowering the fees). My regular readers know how I hate bank service fees.
• Buy 1 less coffee or latte a day and put that money in your top desk drawer (and then put it monthly in your emergency or RRSP account ).

Simple as that, no fuss, no muss, and less worry, if you hit those goals.

Tomorrow

What to look for in your Personal Finance Plan and how to deal with success and with failures.

Back to Stats Canada for another very interesting statistic, there are more Canadians in pensions as of January 1, 2008. This is a surprising number, but also an old number.

As of January 1, 2008, membership in registered pension plans (RPPs) in Canada amounted to 5.9 million, an increase of more than 140,000, or 2.4%, from the previous year.

Given the difficulties of a few large private pension programs (Nortel, GM, and Ford to name a few), my guess would be the number from January 1, 2008 to now is a big drop.  The whole business of private firms with pensions is becoming a bigger and bigger issue, given the liability this represents to these firms (Air Canada is talking about their pensions, AGAIN, as an example).

Will the defined benefit pension in the private sector be going in the same direction as the North American Auto Industry? Not sure, but it does show that the benefits package for today’s employee is changing.

Will the worker of today be able to retire? I keep asking this question, I think the answer is simple, the age of retirement is going to change from 65 to an older age (70 or 75).

Cell Phone News

With Rogers and Fido both confirming that they will have the new iPhone 3G S available the day they are available in the U.S. , which is interesting, if not a little expensive. The new iPhone has some interesting new features, but is still far too rich for my blood.

A more interesting report by TechCrunch (based on a report by Juniper Research) states that cheap phone set sales will be up by 22% by 2014 or over 700 Million units per year. That is even more interesting, more consumers are simply buying cheap phones (especially all over the world), instead of buying “Smart Phones”. I am not surprised by this data, but it is very interesting.

Cheap Phone Sales Graph

Friday Stats Canada did their Labour Survey for May and the numbers continue to be not encouraging. 

Following gains in April, employment decreased by 42,000 in May, led by further manufacturing losses in Ontario. The unemployment rate rose by 0.4 percentage points to 8.4%, the highest rate in 11 years. Since the employment peak of last October, employment has fallen by 363,000 or 2.1%.

Ontario seems to be taking the brunt of this economic downturn, which is not surprising really, as the manufacturing heartland would be where this might hurt the most, but with the Canadian Dollar strengthening there may be another “wammy” coming for Ontario.

In May 2009, there were 778,000 factory workers in Ontario, the lowest level since comparable data became available in 1976. Manufacturing employment in Ontario reached a peak in November 2002 with 1,115,000 workers.

Not encouraging for the manufacturing sector, but with the Auto sector being included in this group, not very surprsing either.

April 2009 Unemployment Numbers

Old Folks Getting Hit Hard

For old farts like me, there were less encouraging numbers as well.

Employment fell by 50,000 in May for persons aged 25 to 54, with losses of 28,000 among men and 22,000 among women. Since the start of the labour market downturn, however, it is men in this age group who have experienced most of the losses, down 3.4%, while employment among core-age women has fallen by 1.1% over the same period.

Doesn’t anyone want old cunning folk over young exhuberant folk?

In a week where I discussed my investing tactics, balance is the important topic to remember. All things need balance, and ensuring your investments and retirement strategies are in good balance is very important, too much of anything can be a bad thing. 

Random Financial Thoughts

Of the financial bloggers I read, these articles caught my attention:

• The Canadian Capitalist did an update on his Sleepy Mini Portfolio (I base one of my RRSP’s on this set of index funds). Remember the importance of re-balancing in this type of strategy.
• One Caveman is going into semi-retirement (a notion I toy with every month or so these days as well), in Thank You For Joining Me On My Journey.
• Canadian Financial DIY is asking whether Claymore is Being Sneaky about Showing Fees on it’s ETFS? Sounds sneaky to me. 
• Michael James comments on the upcoming Entrust Shareholders Vote on a Takeover where he has a stake in the outcome. 
• Larry MacDonald is Praying for the Vanguard takeover of iShares, which hopefully will bring lower MERs.
• Preet at Where Does All My Money Go, says the Countdown Begins, but this is for a new venture for him on the W Channel, stay tuned!
• Four Pillars wrote about Creating a Fake Reputation and his experience in these areas. Go with your gut, and if it feels bad, it’s bad, is not bad advice.

Looks to be a nice weekend here in Ottawa, get out and enjoy it!