Canadian Personal Finance Blog

If you are planning on making financial New Years resolutions do yourself a favour and make them measurable. When they are measurable they are attainable.

Here is a good example of some noble resolutions

• I will save more this year
• Pay down my mortgage
• Lose weight

I applaud you if these are your goals, however, how are you going to know whether you have succeeded or not? Without a tangible financial goal you are doomed to failure.

More tangible versions of the same goals might be:

• The balance in my TFSA on Dec 31 2019 will be 10% larger than on January 1 2019. This is very specific, you can even put actual values in there, which makes things easier for you to monitor your goal.
  • Remember if you are saving for your kids’ educations an RESP goal of $2500 added to the account would be good.
  • RDSP contributions for your child need to be there as well.
• My mortgage principal will be $10,000 lower at the end of this year. The important thing is to set a tangible financial goal. How you do it is left open, but what the goal is, is concrete.
  • You can automate this goal, and make it easier. Setting up automatic over payments on your on-line banking of $400 per pay (if you are paid bi-weekly) makes this resolution real.
• I will lose 60 pounds this year by going to the gym at least 150 times. Ideally I will try to lose 5 pounds a month. Again, this is very concrete, and easily monitored.
  • In my case I am lucky as my office has a gym I can use for free.

Resolutions are wonderful things (although you can set goals any day of the year), but they must be specific. Saying, “I will be a better person” is admirable sentiment, but what does it mean and how are you going to do this?

• Give more to charities?
• Being more positive in your life outlook? (again really hard to monitor this, unless you tell someone who can say, “You really are being a sour puss these days”).

Make your goals and resolutions tangible and measurable and you are more likely to succeed. Also, remember to put your resolutions somewhere where you can be reminded about them.

1. Set the background of your computer or tablet with them?
2. Put them on your refrigerator?
3. Tell your spouse, they will remind you.

At the start of the year, I actually did publish a Stock Picks for 2018 article, which is a rarity for me. I am not in the stock picking business I am into Index Funds, and my stock picks reflected that fact.

This year has ended quite nastily for the markets. After 10 years of growth, you had to know something was going to change, and so far the great shart of 2018 continues. We shall see when the bottom hits.

What happened with all of my picks? Let me refresh your memory.

• Canadian Index Fund based on a TSE index like TDB900 – TD Canadian Index (e-Series)
• US Index Fund based on the Dow Jones Industrial Average like TDB902 – TD US Index (e-Series)
• A Canadian Bond Fund like TDB909 – TD Canadian Bond Index (e-Series)
• International Index Fund like TDB911 – TD International Index (e-Series)
• A Dividend ETF (if you are so inclined) like FTSE Canadian High Dividend Yield Index ETF (VDY)

A fairly typical Couch Potato portfolio. How much of each you buy is up to you, but let us assume an equal amount bought in each of these funds.

At the end of the year you would have lost about $21 or 0.42% of your investment. Given how the markets are running right now, not too bad really.

If you are an investor in individual stocks, I wish you good luck. For Indexers let us remember the sage words of Preet B., “I am an Indexer, I don’t care what the Index did today!“

Just to get everyone in a festive Christmas spirit allow me to offer, this cautionary tale of Christmas Debt.

The 12 Days of Christmas DEBT

12 Months of Agonizing Payments

Have you paid off last Christmas yet? How about the one before that?

11 Maxed Out Credit Cards

How much room do you have on those cards? Really?

10 Overdrafts a leaping

Really, how much are you paying in overdraft fees? Just because your bank balance can show a negative value, doesn’t mean it should always be that way!

9 Minimum Payments

You realize you will pay that off in 20 years with those minimum payments, or possibly 50 years? Minimum payments simply forestall the inevitable.

8 Balance Transfers

Shuttling debt from one credit card to another is not solving the problem. Juggling chainsaws will lead to a messy end, and that is what this is.

7 Cashed in Emergency Funds

Christmas debt is an emergency? Don’t think that is the emergency you were planning for.

6 Pay Day Loans

This could be starting a death spiral in your finances that will lead you to Day (3)

5 Gold Reclamations!

Did your Grandmother leave you that ring to help you cash it in for pennies on the dollar to pay off debt?

4 Calling Collection Agencies

These are not the bogus ones you get emails from, these are the real ones

3 Calls to insolvency trustees

They can help, but you can’t keep doing this every year either.

2 Calls to your family for an emergency loan

You do have to pay those back, you realize?

1 Mortgage Refinance

Using the equity in your house to pay for consumer debt is a very bad thing.

Yes, not very festive, but ultimately a bit too true. I go to Church and I am confident the Christmas season is not designed to bankrupt you. It is at time to get together with family and friends. 

Wonder why you dislike this time of season? How many of the Days of Debt on the list are you facing in January? 

With Advent upon us, it is not much time until Christmas will be here (and then gone). Did you realize there is actually a Financial Advent Calendar on this very site? You can consult it here.

With interest rates slowly rising, is it time to rethink short term savings? A good example is your RESPs for your kids. Should you be thinking about using GICs to ensure the money grows slowly but safely? Can you even use GICs in your child’s RESP? All good questions. Now you can get GICs with interest rates above 2%, maybe you should at least be putting your kids’ Grant money and put that in  there? Remember it is near year end, if  there is room still left you should  put a top up to get to your $2500 yearly maximum payment to the RESP.

My view of the Stock Market is it is currently having a shart. If you are unclear on what a shart means, please clock on the link. This shart might become something worse soon, given the trade stupidity going on, but for nice it is a mess caused by someone thinking they were only letting off gas.

Are planning on playing the Christmas Money Polka this season? It’s a simple game where you have bought many things on credit, and when the bill arrives in January, because you didn’t budget well you take the cash you got from family and pay off some of those bills. The money just goes round and round, and at the end of it you feel sick (just like a Polka), and broke.

Did you start your Emergency Fund with the idea that you were going to pay off Christmas with it? That’s not an emergency fund, that is a Christmas Fund. Maybe you should have both? Remember starting to plan for Next Christmas can start before this Christmas. You will have a better Christmas perspective now, than in July next summer.

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