{"id":16824,"date":"2020-12-14T08:00:00","date_gmt":"2020-12-14T13:00:00","guid":{"rendered":"https:\/\/www.zolo.ca\/blog\/?p=16824"},"modified":"2022-01-04T18:55:29","modified_gmt":"2022-01-04T23:55:29","slug":"personal-finance-checklist","status":"publish","type":"post","link":"https:\/\/www.zolo.ca\/blog\/personal-finance-checklist","title":{"rendered":"A 10-Point Personal Finance Checklist to Start 2021 Strong"},"content":{"rendered":"\n\n\n<p>Typically the end of the year is a busy, merry time filled with fun and family, rest and relaxation, or both. It\u2019s a time of year where lists seem to dominate, even in an atypical year like 2020. Lists of presents; lists of people to call; gratitude lists. One of the most important lists you should check twice this year is your personal finance checklist.&nbsp;<\/p>\n\n\n\n<p>As the end of the year approaches, it\u2019s time to run through the list of key financial tasks and check off all those key financial tasks that help us save money and build a stronger financial future.&nbsp;<\/p>\n\n\n\n<p>There\u2019s evidence that keeping a list helps. A North Carolina <a href=\"http:\/\/users.wfu.edu\/masicaej\/MasicampoBaumeister2011JPSP.pdf\">study<\/a> by professors Baumeister and Masicampo shows that uncompleted tasks distract us. Incredibly, the study also showed that just by making a plan to get them done we can free ourselves from anxiety. As Bechman notes: \u201cSimply writing the tasks down will make you more effective.\u201d&nbsp;<\/p>\n\n\n\n<p>Managing money and working through your own personal finance checklist can prevent unnecessary stress over finances and, more importantly, help you survive the tough times. Just ask nationally recognized financial journalist, Kerry Taylor of <a href=\"https:\/\/www.squawkfox.com\/\">Squawkfox.com<\/a>.&nbsp;<\/p>\n\n\n\n<p>\u201cI didn\u2019t have \u2018survive cancer only to face a global pandemic\u2019 on my 2020 Bingo card, but being prepared for life\u2019s uncertainties has served me well through many financial storms,\u201d explains Taylor.&nbsp;<\/p>\n\n\n\n<p>To put it bluntly, it pays to be thoughtful about how you spend, save, earn, and invest money \u2014 and it pays to think about the systems and processes that make these money decisions happen.&nbsp;<\/p>\n\n\n\n<p>We\u2019ve talked to nine money and health experts. Through their insight and knowledge, we created an easy 10-point personal finance checklist. Use this checklist to avoid missing a deadline or help capture a savings opportunity. The tasks on the personal finance checklist will help you end this year and start the new year on a strong financial foundation.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"5539\" loading=\"lazy\" src=\"https:\/\/www.zolo.ca\/blog\/wp-content\/uploads\/2020\/12\/personal-finance-checklist-1-1024x5539.jpg\" alt=\"\" class=\"wp-image-16923\"\/><\/figure>\n\n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-flow wp-block-group-is-layout-flow\">\n<section class=\"bg-white border-t border-b border-blacklight my-12 md:my-16 sticky md:relative top-0 md:top-auto z-10 md:z-auto alignwide  wp-block-zolo-block-toc \" aria-hidden=\"true\"><div class=\"wrapper relative max-w-2xl mx-auto md:py-8 flex flex-col flex-shrink-0 max-h-screen md:max-h-none\"><input type=\"checkbox\" id=\"toc-toggle\" class=\"hidden\"\/><label for=\"toc-toggle\" class=\"flex justify-between cursor-pointer md:cursor-auto py-4\"><div class=\"toc-title leading-normal font-medium m-0\">In this article<\/div><svg class=\"w-6 h-6 fill-current text-blue md:hidden transition-transform duration-150 ease-in-out\" viewbox=\"0 0 24 24\"><path d=\"M22 12c0-5.5-4.5-10-10-10S2 6.5 2 12s4.5 10 10 10 10-4.5 10-10zM6.9 10.9l1.4-1.4 3.7 3.7 3.7-3.7 1.4 1.4L12 16l-5.1-5.1z\"><\/path><\/svg><\/label><nav id=\"toc-nav\" class=\"zolo-toc-nav max-h-0 md:max-h-full overflow-y-auto scrollbar-hidden overscroll-none\"><ul class=\"zolo-toc-list my-4\"><li><a class=\"entry-title no-underline hover:underline\" href=\"#personal-finance-checklist-with-tips-from-9-financial-experts\">Personal Finance Checklist With Tips From 9 Financial Experts<\/a><\/li><li><a class=\"entry-title no-underline hover:underline\" href=\"#finish-the-year-strong\">Finish the Year Strong<\/a><\/li><li><a class=\"entry-title no-underline hover:underline\" href=\"#get-a-copy-of-your-credit-report\">Get a Copy of Your Credit Report<\/a><\/li><li><a class=\"entry-title no-underline hover:underline\" href=\"#make-a-budget\">Make a Budget<\/a><\/li><li><a class=\"entry-title no-underline hover:underline\" href=\"#review-your-spending-habits\">Review Your Spending Habits<\/a><\/li><li><a class=\"entry-title no-underline hover:underline\" href=\"#prioritize-saving-(or-figure-out-how-to-save-money)\">Prioritize Saving (Or Figure Out How to Save Money)<\/a><\/li><li><a class=\"entry-title no-underline hover:underline\" href=\"#maximize-tax-savings\">Maximize Tax Savings<\/a><\/li><li><a class=\"entry-title no-underline hover:underline\" href=\"#audit-and-update-your-investment-plan\">Audit and Update Your Investment Plan<\/a><\/li><li><a class=\"entry-title no-underline hover:underline\" href=\"#review-your-estate-plan\">Review Your Estate Plan<\/a><\/li><li><a class=\"entry-title no-underline hover:underline\" href=\"#review-your-insurance-needs-and-coverage\">Review Your Insurance Needs and Coverage<\/a><\/li><li><a class=\"entry-title no-underline hover:underline\" href=\"#maximize-earnings-\">Maximize Earnings\u00a0<\/a><\/li><li><a class=\"entry-title no-underline hover:underline\" href=\"#focus-on-you\">Focus On You<\/a><\/li><li><a class=\"entry-title no-underline hover:underline\" href=\"#final-thoughts\">Final Thoughts<\/a><\/li><\/ul><\/nav><\/div><\/section>\n<\/div><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"personal-finance-checklist-with-tips-from-9-financial-experts\">Personal Finance Checklist With Tips From 9 Financial Experts<\/h2>\n\n\n\n<p>To end 2020 the right way, it\u2019s important to focus on each of the key components of strong money management. We asked our nine personal finance experts to weigh in on what to do, when, and the best way to implement.&nbsp;Use the 10-point personal finance checklist to stay on track with our finances throughout the year. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"<strong&gt;finish-the-year-strong<\/strong&gt;\"><strong>Finish the Year Strong<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"<strong&gt;deadline:<\/strong&gt;-december-31,-2020\"><strong>Deadline:<\/strong> December 31, 2020<\/h3>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/lh3.googleusercontent.com\/vhb12OktipaXVWwYUyJNbHS5ZuuupnIRjcznzycLVn4HLxSF4OqsJNQuU56QABmBqrfaYBdtRjxnfgXaA4d9mRMW1fptOKYwP23vmfrUZBa9DkwlrYsx5uXbT27XtM_XhP-PNrs0\" alt=\"\"\/><\/figure>\n\n\n\n<p>Want to start 2021 strong? Then you\u2019ll need to end this year with a few last-minute financial planning tasks and strategies (use the personal finance checklist above, to keep you on track).&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-task-1-make-your-registered-plan-contributions\"><strong>Task 1: Make Your Registered Plan Contributions<\/strong><\/h3>\n\n\n\n<p>Do you have a Tax Free Savings Account (TFSA)? A child under 18 or with a disability? If so, you\u2019ll want to contribute to the associated registered accounts before December 31.&nbsp;<\/p>\n\n\n\n<p>Although you can contribute to registered plans at any time, there are caps, limits and grants that apply to each calendar year.&nbsp;<\/p>\n\n\n\n<p>For 2020, the <strong>TFSA contribution limit is $6,000. <\/strong>And it\u2019s been confirmed that the&nbsp; <strong>contribution limit for 2021 will also be $6,000<\/strong> \u2014 making the total contribution limit, since inception, $75,500. For more on this investing account, read <a href=\"https:\/\/dividendearner.com\/tfsa-contribution-limit\/?utm_source=Newsletter&amp;utm_campaign=b410c25d39-Solid+Dividend+Growth+for+this+Medical+Device_COPY&amp;utm_medium=email&amp;utm_term=0_98c03ec005-b410c25d39-144705326\">Dividendearner.com<\/a>.&nbsp;<\/p>\n\n\n\n<p>For Registered Education Savings Plans <strong>(RESP), you\u2019ll want to contribute before December 31 in order to qualify for this year\u2019s Canada Education Savings Grant (CESG).<\/strong> <strong>Each year, your contributions qualify for a 20% grant, up to $2,500.<\/strong> If you contribute the entire sum, you would get a $500 top-up grant from the federal government per child. (There is a maximum lifetime grant total of $7,200). You can always contribute more, but $500 is the maximum grant you can get per year. Remember, there are also special rules in the calendar year your child turns 17.&nbsp;<\/p>\n\n\n\n<p>When it comes to the Registered Disability Savings Plan (RDSP), it pays to contribute every calendar year. Each year, the <strong>first $500 you contribute to an RDSP, the government will deposit $3 for every $1 you contribute, up to $1,500 a year.<\/strong> For the next $1,000 you contribute each year to the RDSP, the government will deposit $2 for every $1 you contribute, up to an additional $2,000 a year.<\/p>\n\n\n\n<p>The only exception to the year-end deadline is the Registered Retirement Savings Plan (RRSP). Every year, Canadians have until the end of February or beginning of March to contribute to their RRSP for the following year. For 2020, investors had until March 2 to contribute to their RRSP and use the contribution as part of their 2019 tax year. In 2021, <strong>Canadians will have until March 1, 2021, to contribute to their RRSP for their 2020 tax return<\/strong>.&nbsp;<\/p>\n\n\n\n<p>To maximize your tax-savings and your retirement portfolio, consider using a retirement calculator. Here are a few good online retirement calculators you can use: <\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The <a href=\"https:\/\/www.canada.ca\/en\/services\/benefits\/publicpensions\/cpp\/retirement-income-calculator.html\">Government of Canada<\/a> offers an online guide and retirement calculator, but you will need to have certain information already at your fingertips; <\/li><li>Morneau Shepell&#8217;s <a href=\"https:\/\/perc.morneaushepell.com\/\">Personal Enhanced Retirement Calculator (PERC)<\/a> is best for Canadians aged 50 to 80 (or those within 10 years of retirement); <\/li><li>The Ontario Securities Commission offers a great <a href=\"https:\/\/www.getsmarteraboutmoney.ca\/calculators\/retirement-cash-flow-calculator\/\">Retirement Cash Flow Calculator<\/a>; <\/li><li><a href=\"http:\/\/moneypages.ca\/calculator\/2\/basic-retirement-calculator\">Moneypages.ca<\/a> offers a basic retirement calculator that can give a quick overview; <\/li><li>Finally, for those that like a few more features, check out the retirement calculator from <a href=\"https:\/\/www.calculator.net\/retirement-calculator.html\">Calculator.net<\/a>.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-task-2-harvest-tax-losses\"><strong>Task 2: Harvest Tax Losses<\/strong><\/h3>\n\n\n\n<p><strong>One way to offset capital losses is by using capital gains. <\/strong>To take advantage of this, investors will sell a holding that has lost money. It\u2019s called tax-loss selling.&nbsp;<\/p>\n\n\n\n<p>Just remember, you can only use capital losses to offset capital gains. If you do not have capital gains, the CRA allows you to carry your losses forward, to be used in subsequent tax years. Also, <strong>you cannot harvest capital losses from registered accounts,<\/strong> including RESPs, TFSAs, and RRSPs, only non-registered accounts.\u00a0<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-task-3-make-charitable-contributions\"><strong>Task 3: Make Charitable Contributions<\/strong><\/h3>\n\n\n\n<p>If you plan on giving money, you might as well get a tax credit. This means giving strategically, rather than impulsively, like that last-minute decision to give a buck after a cash-register plea.&nbsp;<\/p>\n\n\n\n<p>Focus on the charity or cause you want to support and offer cash or in-kind donations (such as stock). Just remember that <strong>to qualify for a tax credit for this taxation year, you must submit your donation to the charity by December 31.<\/strong> Plus, only donations (gifts) to registered charities and other qualified donors (click <a href=\"https:\/\/www.canada.ca\/en\/revenue-agency\/services\/charities-giving\/charities\/charities-giving-glossary.html#qualdonee\">here<\/a> for CRA definition of a qualified donee) can be claimed as charitable donations. CRA has a charities registry web page, <a href=\"https:\/\/www.canada.ca\/en\/services\/taxes\/charities.html\">Charities and Giving<\/a>, where you can search charity listings to see if a particular charity is a registered.<\/p>\n\n\n\n<p>If you are in a relationship, <strong>consider maximizing your charitable tax credit by combining donations made by both spouses. <\/strong>As long as the total sum is greater than $200, both spouses\u2019 donations can be combined and claimed on one tax return. This helps to increase the tax credit, particularly if claimed by the higher-income earner.&nbsp;<\/p>\n\n\n\n<p>Just be sure to check your tax return carefully, as it\u2019s possible that by claiming all donations on one tax return, the credits cannot be completely utilized. If this is the case, you can either carry forward some of the donations or split the donations between spouses. Also, keep in mind that <strong>you can only reduce up to 75% of your net income through charitable contribution tax credits<\/strong>. For more, see the <a href=\"https:\/\/www.canada.ca\/en\/revenue-agency\/services\/charities-giving\/giving-charity-information-donors\/claiming-charitable-tax-credits.html\">CRA site on claiming charitable tax credits<\/a>.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-task-4-pre-pay-your-mortgage-debt\"><strong>Task 4: Pre-pay Your Mortgage Debt<\/strong><\/h3>\n\n\n\n<p>If you plan on making a lump sum prepayment against your mortgage debt, you may want to schedule that before December 31.&nbsp;<\/p>\n\n\n\n<p>A prepayment allows you to pay a lump sum against the principal debt. Do this, and you could shave months and years off your prepayment term and tens of thousands off of the interest you pay.&nbsp;<\/p>\n\n\n\n<p>Be careful, though, since <strong>some lenders calculate the \u201cyear\u201d based on the calendar year \u2014 making December 31 the cut off date \u2014 while some lenders calculate it based on your mortgage anniversary date. <\/strong>To be sure, either read your contract or contact your lender.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"<strong&gt;get-a-copy-of-your-credit-report<\/strong&gt;\"><strong>Get a Copy of Your Credit Report<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"<strong&gt;deadline:-<\/strong&gt;before-december-31,-2020-or-as-soon-as-possible\"><strong>Deadline: <\/strong>Before December 31, or as soon as possible<\/h3>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/lh3.googleusercontent.com\/tUdK1RPP2gJFDfr_yyhuaJ41-Uf3fMSjHuAQY6Ip1DOmueVFs8DjlNO_qoH-l00VSsDGMgtMvvwzLYg2NX4r4CdpKmEKiT_GzJm_QceP-mHzJKIBNRLcwTVqAU2K4Fu7KgKGY1nW\" alt=\"\"\/><\/figure>\n\n\n\n<p class=\"is-style-default\">Your credit score is a snapshot of your credit history.&nbsp;Your credit history is captured in full by your credit report. Obtaining a copy of your credit report is in the first phase of the personal finance checklist.<\/p>\n\n\n\n<p>In your credit report, there is detailed information about all your credit accounts \u2014 all loans or charge accounts \u2014 both current as well as in the past. Your report also shows how much credit you have access to, and how often you pay your bills on time.<\/p>\n\n\n\n<p><strong>Credit reports usually do not contain your credit score<\/strong>, but the report does provide invaluable insight to lenders about your credit history. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"what-is-a-good-credit-score?\">What Is a Good Credit Score?<\/h3>\n\n\n\n<p>Credit scores range between 300 and 900 and a higher number means less risk for lenders.<\/p>\n\n\n\n<p>In Canada, credit ratings are broken down into five categories:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Poor \u2013 559 and under.<\/li><li>Fair \u2013 560 to 659<\/li><li>Good \u2013 660 to 724<\/li><li>Very Good \u2013 725 to 759<\/li><li>Excellent \u2013 760 and over<\/li><\/ul>\n\n\n\n<p>(In America, these ranges vary slightly with excellent scores ranging between 800 and 850; very good between 740 and 799; good scores between 670 and 739 and fair scores between 580 and 669).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-check-your-credit-report\">Check Your Credit Report<\/h3>\n\n\n\n<p><a href=\"https:\/\/www.consumerfinance.gov\/about-us\/blog\/common-errors-credit-report-and-how-get-them-fixed\/\">According to the Federal Trade Commission<\/a>, an estimated 1 in 5 American consumers have errors in their credit reports. <\/p>\n\n\n\n<p>Every year, review a copy of your credit report to make sure the information is accurate, complete, and up-to-date. If possible, always take this step before you apply for a loan or make a major purchase like a house, car, or buy insurance, or apply for a job. That&#8217;s because you want to be sure there are no errors in your report and that you have a good credit score. <\/p>\n\n\n\n<p>You&#8217;re entitled to one free copy of your credit report every 12 months from each of the credit reporting agencies, TransUnion Canada and Equifax.&nbsp;<\/p>\n\n\n\n<section class=\"wp-block-zolo-related flex items-center py-6 leading-tight border-t border-b border-blacklight undefined\"><p class=\"font-serif pr-6 md:pr-12 mr-6 md:flex-shrink-0 border-r border-blacklight\">Related content<\/p><p class=\"related-link w-full my-0\"><a href=\"https:\/\/www.zolo.ca\/blog\/improve-your-credit-score\">Impact of Credit Scores<\/a><\/p><\/section>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"<strong&gt;make-a-budget<\/strong&gt;\"><strong>Make a Budget<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"<strong&gt;deadline:<\/strong&gt;-as-soon-as-possible\">Deadline: As Soon as Possible<\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"1200\" loading=\"lazy\" src=\"https:\/\/www.zolo.ca\/blog\/wp-content\/uploads\/2020\/12\/do-Canadians-budget-Zolo-1.png\" alt=\"\" class=\"wp-image-16925\"\/><\/figure>\n\n\n\n<p>The end of the year is a good time to take stock of your current financial standing and make a plan for financial success in the new year.<\/p>\n\n\n\n<p>\u201cWith the holidays behind us, you can now focus on what major expenses you have coming up this year. Take a look at your calendar and figure out when you&#8217;ll likely be spending more than usual. This could be tuition, vacations, insurance or even a new laptop. The idea here is to have a clear visual of when you&#8217;ll need to drop some money so you can plan accordingly,\u201d explains personal finance and travel expert Barry Choi, author of <a href=\"https:\/\/www.moneywehave.com\/\">MoneyWeHave.com<\/a>. \u201cIt&#8217;s a lot easier to cut back on your spending when you know a major expense is coming up.\u201d&nbsp;<\/p>\n\n\n\n<section class=\"wp-block-zolo-related flex items-center py-6 leading-tight border-t border-b border-blacklight undefined\"><p class=\"font-serif pr-6 md:pr-12 mr-6 md:flex-shrink-0 border-r border-blacklight\">Related content<\/p><p class=\"related-link w-full my-0\"><a href=\"https:\/\/www.zolo.ca\/blog\/monthly-homeownership-costs\">How Much Does Homeownership Really Cost?<\/a> <\/p><\/section>\n\n\n\n<p>Like to-do lists, our brains work better when we have all our spending down on paper.&nbsp; A budget helps us prioritize debt repayment, work on a savings strategy and even find a few dollars to spend on ourselves.&nbsp;Making a budget and reviewing spending habits is an important part of the personal finance checklist.<\/p>\n\n\n\n<p>Just don\u2019t be surprised if your budget is busted this year, cautions Taylor. \u201cThis year was brutal, and you\u2019ll likely need to make some financial adjustments heading into 2021 \u2014 and that\u2019s normal!\u201d If you want a good start, check out Taylor\u2019s <a href=\"https:\/\/www.squawkfox.com\/budget-spreadsheet\">Free Budget Spreadsheet<\/a>. \u201cRemember, simple budgets are easy and can help protect against financial disaster and even life in general.\u201d<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/lh5.googleusercontent.com\/5txyeIeVv2uW4cPH_J1ixJ75ft1B0kAQYPh4WKjx_sOTQw0z-GqsJ_EFFd4kb65Ff_jv2VsuuPZqlXxM63goVfozNv4K0MPDtlv-3LBFVK5U0dM9zp4ew0DGZZEUSJAOmBI41enu\" alt=\"\"\/><\/figure>\n\n\n\n<p>While the thought of making a budget can sound tedious or overwhelming, it doesn\u2019t have to be this way. Consider how you work best, and then adapt a method that works for you. Just keep in mind that the goal of a good budget is to:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Align your spending with your goals;&nbsp;<\/li><li>Improve your debt repayment strategy;&nbsp;<\/li><li>Help you achieve your savings goals.&nbsp;<\/li><\/ul>\n\n\n\n<section class=\"wp-block-zolo-related flex items-center py-6 leading-tight border-t border-b border-blacklight undefined\"><p class=\"font-serif pr-6 md:pr-12 mr-6 md:flex-shrink-0 border-r border-blacklight\">Related content<\/p><p class=\"related-link w-full my-0\"><a href=\"https:\/\/www.zolo.ca\/blog\/real-costs-of-owning-a-home\"><a href=\"https:\/\/www.zolo.ca\/blog\/real-costs-of-owning-a-home\">Real Costs of Owning a Home<\/a><\/a><\/p><\/section>\n\n\n\n<p>To help you figure out the best budgeting technique, consider the following three methods:&nbsp;<\/p>\n\n\n\n<ol class=\"wp-block-list\"><li><strong>Traditional Budget:<\/strong> A simple, basic strategy of using a spreadsheet to list your income and expenses to find the difference. It\u2019s easy to use and set up and allows you to customize your spending targets in each category.&nbsp;&nbsp;<ul><li><strong>Best for: <\/strong>Detail-oriented people or people who like to walk through the financial weeds.&nbsp;<\/li><li><strong>Not good for: <\/strong>Big picture people or people who get overwhelmed easily when it comes to financial planning.&nbsp;<\/li><\/ul><\/li><li><strong>Balanced Budget (aka: 50\/20\/30 Rule Budget): <\/strong>A great option if you want a simple, effective method that groups all expenses into three broad categories: needs, savings, wants.<br><br>The idea is to spend 50% of your total income on needs including housing, groceries and other essential expenditures<br><br>Spent 20% on savings including short-term goals, such as paying off debt and long-time plans, such as retirement savings.<br><br>Spend 30% on \u2018wants\u2019 including monthly subscriptions, like Netflix, or new shoes or dining out.&nbsp;<ul><li><strong>Best for: <\/strong>Those turned off or overwhelmed by traditional budget methods and who want an easy method for categorizing needs versus wants.&nbsp;<\/li><li><strong>Not good for:<\/strong> Those who tend to lose track and consistently overspend.&nbsp;<\/li><\/ul><\/li><li><strong>Envelope Budget (aka: Cash-only Budget): <\/strong>The idea is to allocate a certain amount of money to each spending category. Every month, each category gets a maximum cash budget to spend; once the cash is gone, it\u2019s gone.&nbsp;<ul><li><strong>Best for: <\/strong>People who consistently overspend (particularly on credit cards) or people who want a more disciplined method of spending and saving.&nbsp;<\/li><li><strong>Not good for:<\/strong> People who don\u2019t like to carry cash. NOTE: Another option is to set up a series of no-fee chequing accounts.&nbsp;<\/li><\/ul><\/li><\/ol>\n\n\n\n<p>For more on the various types of budgeting, read the excellent breakdown of various budget methods on <a href=\"https:\/\/www.logicaldollar.com\/budgeting-methods\/\">logicaldollar.com<\/a>.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"<strong&gt;review-your-spending-habits<\/strong&gt;\"><strong>Review Your Spending Habits<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"<strong&gt;deadline:-<\/strong&gt;as-soon-as-possible-and-ongoing\"><strong>Deadline: <\/strong>As Soon as Possible and Ongoing<\/h3>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/lh4.googleusercontent.com\/xboswJvXYRPHc-52sJXz0ptK9kvz1XjFW2jVv1b8rMcvvJEMMyGlvAUhZTyJHWFtPUdj_bTCIkjixtdYyNFmOUIIKjCWJIYwQpz2q5BJTJznvnhfmLE4hKpSNF7icx05E42PQcPV\" alt=\"\"\/><\/figure>\n\n\n\n<p>A budget is pretty useless&nbsp; \u2014 or near impossible to create \u2014 if you don\u2019t have a method of tracking your spending habits.&nbsp;<\/p>\n\n\n\n<p>\u201cI highly recommend making a spending plan for the entire year that takes into account your typical monthly costs, your one-time expenses, <em>and<\/em> your savings or debt repayment goals,\u201d explains Robb Engen, Alberta-based founder and head writer behind the award-winning <a href=\"https:\/\/boomerandecho.com\/\">Boomer &amp; Echo<\/a> personal finance blog.<\/p>\n\n\n\n<p>\u201cThis \u2018year-at-a-glance\u2019 view allows you to see the big picture, account for any unusual or non-recurring items in your budget, and optimize your monthly cash flow.\u201d<\/p>\n\n\n\n<p>To review your spending habits, start with that once-per-year overview. Do this by:&nbsp;<\/p>\n\n\n\n<ol class=\"wp-block-list\"><li>Taking an inventory of all your accounts, including bank, credit cards and lines of credit.&nbsp;<\/li><li>Slot your spending into categories. You can do this manually (write it down or move lines in a spreadsheet) or use a credit card or bank institution that offers an automatic categorization of expenses.<\/li><\/ol>\n\n\n\n<p>The biggest reason for tracking expenses is that it helps us spend wisely.&nbsp;<\/p>\n\n\n\n<p>\u201cI\u2019ve done this for years and my big takeaway is that I can better plan my savings in advance by setting up automatic contributions for the entire year,\u201d explains Engen. \u201cFor example, I might not have $6,000 available on January 1st to make a TFSA contribution, but I can more realistically set up automatic contributions of $500 per month for the entire year. Finally, if you have a partner, make sure you&#8217;re on the same page with your spending plan. I recommend tackling this as a team and making sure your spending is aligned with your goals.\u201d<\/p>\n\n\n\n<p>Set up an easy way to monitor your spending on a monthly basis. Here are a few suggestions on how to do this:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Choose a free digital program or app that can help automate some of this work.<ul><li>For example, in America, clients of the Bank of America use the <a href=\"https:\/\/secure.bankofamerica.com\/login\/sign-in\/signOnV2Screen.go?reason=spending_budgeting&amp;request_locale=en-us&amp;channel=desktop\">Spending &amp; Budgeting<\/a> tool, which automatically categorizes your transactions for easier budgeting in the mobile app or online.<\/li><li>In Canada, most major banks and credit unions offer similar tools. You can also use free apps, such as <a href=\"https:\/\/www.mint.com\/\">Mint<\/a>. Keep in mind that most independent apps will require a bit of set-up time.&nbsp;<\/li><\/ul><\/li><li>Pay to use a digital app that allows you to track all expenses.&nbsp;<ul><li>For example, <a href=\"https:\/\/www.expensify.com\/\">Expensify<\/a> lets you snap a picture of each receipt using your phone. The receipt is then uploaded to your Expensify account. It costs $5\/month for the program, but if you spend time creating categories, folders and expense rules, you can almost automate your entire process of tracking your spending, and create a set of working bookkeeping documents that can be used come tax time.&nbsp;<\/li><li>Another option is <a href=\"https:\/\/www.mint.com\/\">Mint<\/a>. This app is free, but there is a drawback. Like many digital apps, the program only works well if you spend the time to set it up, which requires you to establish connections between credit card accounts and bank accounts; for some, <a href=\"https:\/\/www.thestreet.com\/personal-finance\/is-mint-safe-14814998\">this breach<\/a> of the bank or credit account\u2019s rules feels a bit too risky.&nbsp;<\/li><\/ul><\/li><li>Old-school approach: Use a notebook.&nbsp;<ul><li>Either write down what and when you spend your money (a great option for debit or cash spenders) or use tape or staples to attach receipts. Once a week or once a month, review your spending and keep a tally. This will help you track where and when you spend your money.&nbsp;&nbsp;<\/li><\/ul><\/li><\/ul>\n\n\n\n<section class=\"wp-block-zolo-related flex items-center py-6 leading-tight border-t border-b border-blacklight undefined\"><p class=\"font-serif pr-6 md:pr-12 mr-6 md:flex-shrink-0 border-r border-blacklight\">Related content<\/p><p class=\"related-link w-full my-0\"><a href=\"https:\/\/www.zolo.ca\/blog\/financial-literacy-canada\">How Canadians Overestimate Their Financial Knowledge \u2014 And Pay the Price<\/a><\/p><\/section>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"<strong&gt;prioritize-saving-(or-figure-out-how-to-save-money)<\/strong&gt;\"><strong>Prioritize Saving (Or Figure Out How to Save Money)<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"<strong&gt;deadline:<\/strong&gt;-ongoing\"><strong>Deadline:<\/strong> Ongoing<\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"1200\" loading=\"lazy\" src=\"https:\/\/www.zolo.ca\/blog\/wp-content\/uploads\/2020\/12\/COVID-19-financial-support-Zolo-1.png\" alt=\"\" class=\"wp-image-16926\"\/><\/figure>\n\n\n\n<p>Now that you have identified your expenses, your income and where you spend your money, it\u2019s time to tackle the saving part of your financial plan.&nbsp;Setting savings goals and contributing to an emergency fund is an important step in the personal finance checklist.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"how-to-save-money?\">How to Save Money?<\/h3>\n\n\n\n<p>Experts agree, one of the best ways to save money is to set a goal. Start by thinking of what you might want to save for \u2014 perhaps you\u2019re getting married, planning a vacation or saving for retirement. Then figure out how much money you\u2019ll need and how long it might take you to save it.<\/p>\n\n\n\n<p>Here are some examples of short- and long-term goals:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Short-term (one to three years):&nbsp;<ul><li>Emergency fund (6+ months of living expenses);&nbsp;<\/li><li>Down payment or purchase of a car;&nbsp;<\/li><li>Vacation fund;&nbsp;<\/li><li>Pay down debt.<\/li><\/ul><\/li><li>Mid-term (four to 10 years):&nbsp;<ul><li>Down payment on a home;&nbsp;<\/li><li>Renovation project;&nbsp;<\/li><li>Pay off student loans;<\/li><li>Child\u2019s education fund.&nbsp;<\/li><\/ul><\/li><li>Long-term (11+ years):&nbsp;<ul><li>Retirement planning;&nbsp;<\/li><li>A child\u2019s education fund;&nbsp;<\/li><li>Big luxury purchase (such as a boat or vacation property).&nbsp;<\/li><\/ul><\/li><\/ul>\n\n\n\n<section class=\"wp-block-zolo-related flex items-center py-6 leading-tight border-t border-b border-blacklight undefined\"><p class=\"font-serif pr-6 md:pr-12 mr-6 md:flex-shrink-0 border-r border-blacklight\">Related content<\/p><p class=\"related-link w-full my-0\"><a href=\"https:\/\/www.zolo.ca\/blog\/best-financial-tips-for-generations\">Best Financial Tips for Each Generation<\/a><\/p><\/section>\n\n\n\n<p>While some tasks will be deadline-driven \u2014 such as tax-loss harvesting or contributing to a TFSA for 2020 \u2014 other tasks can be accomplished throughout the year.&nbsp;<\/p>\n\n\n\n<p>The key is to start with smaller, more achievable short-term goals that require some money management (you don\u2019t have cash on hand).&nbsp;<\/p>\n\n\n\n<p>This is how Kerry Taylor of Squawkfox suggests starting out. A big advocate of the emergency fund, Taylor insists that people \u201cstart small and be consistent \u2014 an automatic contribution of around $25 to a high-interest savings account every paycheque adds up!\u201d&nbsp;&nbsp;<\/p>\n\n\n\n<p>Taylor points out that \u201cautomation is key because it removes the temptation and mental friction from having to make the decision to move money every month. Life comes at you fast and I\u2019ve never regretted having a stash of cash on hand for emergencies.\u201d&nbsp;<\/p>\n\n\n\n<p>Also, reaching smaller goals \u2014 and enjoying the fun reward you\u2019ve saved for \u2014 can give you a psychological boost that makes the payoff of saving more immediate and reinforces the habit.<\/p>\n\n\n\n<section class=\"wp-block-zolo-related flex items-center py-6 leading-tight border-t border-b border-blacklight undefined\"><p class=\"font-serif pr-6 md:pr-12 mr-6 md:flex-shrink-0 border-r border-blacklight\">Related content<\/p><p class=\"related-link w-full my-0\"><a href=\"https:\/\/www.zolo.ca\/blog\/family-emergency-management\">Emergency Preparedness: Protecting Your Family in the Most Drastic Situations<\/a><\/p><\/section>\n\n\n\n<p>Here are some examples of integral financial milestones that most people prioritize to help you establish, stay motivated, and achieve your goals.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-build-an-emergency-fund\"><strong>Build an Emergency Fund<\/strong><\/h3>\n\n\n\n<p>\u201cMake building a fully-funded emergency fund your priority,\u201d explains Jessica Moorhouse, financial counsellor and host of <a href=\"https:\/\/jessicamoorhouse.com\/podcast\/\">Mo\u2019 Money Podcast<\/a>. \u201cIf there was ever a year to prove how important it is to have three to six months of your living expenses tucked away in a savings account, it was 2020. Let&#8217;s check this off the list in 2021.\u201d<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-open-a-tfsa-rrsp-other-registered-savings-account\"><strong>Open a TFSA \/ RRSP \/ Other Registered Savings Account<\/strong><\/h3>\n\n\n\n<p>The best time to start saving is when you\u2019re young; even if you don\u2019t consider yourself young, <strong><em>now<\/em><\/strong> is the best time to start saving.<\/p>\n\n\n\n<p>The sooner you start saving, the more juice you\u2019ll get from the power of compounding \u2014 the simple process that takes the money earned on your savings and multiplies it over time.&nbsp;<\/p>\n\n\n\n<p>In the simplest version, it\u2019s the interest earned on your saved money, which becomes part of the lump sum that earns interest, and this repeats over and over again.&nbsp;<\/p>\n\n\n\n<p>Say, for instance, you saved $1,000 each year for 30 years. At the end of 30 years, you would have $30,000 saved. Not bad. But if you were to save $1,000 each year in a high-interest savings account that paid you 3% per year for the next 30 years, then at the end of that period, you would have just over $50,000. That\u2019s better.&nbsp;<\/p>\n\n\n\n<p>Now, if you were to save that money in a Tax Free Savings Account (TFSA), that extra $20,000 could be withdrawn tax-free!&nbsp;<\/p>\n\n\n\n<p>There are other tax advantages to other types of registered accounts, so it pays to know what to open and when.&nbsp;<\/p>\n\n\n\n<p>For now, the best option is to start with a TFSA \u2014 and to do that, you need to be 18 or older, and you need to file an annual tax return (if you don\u2019t already).<\/p>\n\n\n\n<p>For more on how to open a TFSA, read <a href=\"https:\/\/www.ratehub.ca\/bank-accounts\/how-to-open-a-tfsa\">Ratehub\u2019s step-by-step guide<\/a>.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-build-a-basic-balanced-portfolio\"><strong>Build a Basic Balanced Portfolio<\/strong><\/h3>\n\n\n\n<p>When you first start investing set up a balanced portfolio. This is a diversified mix of investments. The mix targets a certain level of risk based on your goals, time horizon, and risk tolerance. (Risk tolerance is a fancy way of saying how much gain you want and how much loss you\u2019re willing to endure).&nbsp;<\/p>\n\n\n\n<p>A balanced portfolio can include a mix of stocks, bonds and short-term investments, or it could be one fund \u2014 ETF or mutual fund.<\/p>\n\n\n\n<p>The reason for the balanced approach is to help limit losses should markets decline, not maximize returns.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"<strong&gt;maximize-tax<\/strong&gt;-savings\"><strong>Maximize Tax<\/strong> Savings<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"<strong&gt;deadline:-<\/strong&gt;april-30,-2021\"><strong>Deadline: <\/strong>April 30, 2021<\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>On average: 9% of Canadians file their tax returns late; <\/strong><\/li><li><strong>The regions with the most delinquent tax-filers are: <\/strong><ul><li><strong>Nunavut (where 14% of residents file their tax return late); <\/strong><\/li><li><strong>Yukon (12%);<\/strong><\/li><li><strong>Ontario (11%); <\/strong><\/li><li><strong>Northwest Territories (11%); <\/strong><\/li><li><strong>British Columbia (10%).<\/strong><\/li><\/ul><\/li><\/ul>\n\n\n\n<p>The goal for this step in the personal finance checklist is simple: Avoid paying taxes using legitimate tax deductions.&nbsp;<\/p>\n\n\n\n<p>Turns out tax deductions can be your best friend since they can reduce what you owe to the CRA in a given tax year.&nbsp;<\/p>\n\n\n\n<p>First identify standard deductions, such as the basic personal amount (BPA). This basic education is available to any household that earns $214,368 or less. As of 2020, the BPA increased to $13,229 (up from $12,298 in 2019).&nbsp;<\/p>\n\n\n\n<p>There is a small chance that the CRA will delay tax filing dates again in 2021. Then again, things might return to normal. To avoid late filing penalties get a jumpstart on the tax filing process by collecting receipts, now.&nbsp;<\/p>\n\n\n\n<p>For the 2020 tax-filing year, you should keep track of a few additional expenses and receipts. These include:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Workspace-in-the home expenses;<\/li><li>Electric or hybrid vehicle capital cost allowance (CCA) deductions.&nbsp;<\/li><\/ul>\n\n\n\n<p>To maximize deductions in 2020, however, you\u2019ll need to pay attention to year-end deadlines. For example, sell poor-performing investments, not held in registered accounts, prior to December 31, 2020, if you want to harvest those losses and use them to offset taxes owed.&nbsp;<\/p>\n\n\n\n<p>\u201cIn terms of tax tips for the end of the year I&#8217;d say one of the bigger ones to focus on is any capital gains and losses you want to realize within your investments. It&#8217;s a good idea to look at what you&#8217;ve sold this year and figure out what you have in terms of capital gains and losses,\u201d explains <a href=\"http:\/\/janinerogan.com\/\">Janine Rogan<\/a>, Certified Professional Accountant (CPA) and <a href=\"https:\/\/www.youtube.com\/channel\/UCtoUXMcl5vSmJLboSEQpB4A\">financial educator<\/a>. <\/p>\n\n\n\n<p>\u201cFrom there, you can decide if you want to sell any more of your investments (maybe you&#8217;ll need the cash in the coming months) or if you can wait till January to shift the tax burden to the following year.\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"<strong&gt;audit-and-update-your-investment-plan<\/strong&gt;\"><strong>Audit and Update Your Investment Plan<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"<strong&gt;deadline:-<\/strong&gt;ongoing\"><strong>Deadline: <\/strong>Ongoing<\/h3>\n\n\n\n<p><strong>The number of people who have a Tax-Free Savings Account, by age group: <\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>6% of Gen Z (18 to 24)   <\/strong><\/li><li><strong>9% of young millennials (25 to 29) <\/strong><\/li><li><strong>17% of Gen Y (30 to 39) <\/strong><\/li><li><strong>23% of Gen X (44 to 55)<\/strong><\/li><li><strong>33% of Baby Boomers (56 to 74)<\/strong><\/li><li><strong>12% of seniors (75+)<\/strong><\/li><\/ul>\n\n\n\n<p>Either at year-end or the start of the year, you&#8217;ll want to review how your investment portfolio performed over the past year. This step in the personal finance checklist helps you determine whether adjustments are needed to keep you on track for your near-term and longer-timeline financial goals.&nbsp;<\/p>\n\n\n\n<p>Whether you work with a financial planner or you\u2019re a do-it-yourself investor, here are some questions you need to answer:&nbsp;<\/p>\n\n\n\n<ol class=\"wp-block-list\"><li>How did my investments perform during the year? Did they outperform, match, or underperform my benchmarks or expectations?<\/li><li>What caused the portfolio to perform the way it did? Was it due to one or multiple factors?<\/li><li>Were there any consistencies or anomalies compared to past performance?<\/li><li>Does money need to be redirected in order to pursue my short-term and long-term goals?<\/li><li>Is the portfolio adequately diversified? Does the existing asset allocation still make sense?<\/li><\/ol>\n\n\n\n<p>Answering these questions helps you determine whether your investment strategy needs to change in the coming year.<\/p>\n\n\n\n<p>As a champion of passive index investing \u2014 a strategy that attempts to maximize returns by replicating market gains (and losses) rather than trying to beat the market \u2014 Kyle Prevost, founder of <a href=\"https:\/\/youngandthrifty.ca\/\">Young and Thrifty<\/a> and writer at <a href=\"https:\/\/milliondollarjourney.com\/\">Million Dollar Journey<\/a> considers a year-end review absolutely critical.&nbsp;<\/p>\n\n\n\n<p>According to Prevost, this year, in particular, highlights the benefits of investing based on a strategy not emotion.&nbsp;<\/p>\n\n\n\n<p>&#8220;We saw many active investors run for the sellout hills at the worst possible time, whereas all of the data from companies like Vanguard and US-based Robo advisors concluded that passive investors stayed the course at a mucher higher rate.\u201d<\/p>\n\n\n\n<p>Long-term passive strategies are not the only way disciplined investors gained this year. Prevost points out that investors who held Canadian-dividend stock did just fine this year. Still, for those passive investors, holding a \u201cbasic TSX60 index [meant [getting] great returns from a company most Canadians have never even heard of: Spotify!\u201d&nbsp;&nbsp;<\/p>\n\n\n\n<p>If you feel a bit lost and need to develop an investment strategy, read Robb Engen\u2019s <a href=\"https:\/\/www.greedyrates.ca\/blog\/how-to-invest-for-beginners\/\">GreedyRates<\/a> article on how to start investing.<\/p>\n\n\n\n<p>Even with a strategy, you\u2019ll need to address a few fundamentals of a good investment strategy on an annual basis.&nbsp;&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-aim-for-balance\"><strong>1: Aim for Balance<\/strong><\/h3>\n\n\n\n<p>When you first start investing, you probably set up a balanced portfolio. The approach aims to maximize equity gains but balance the volatility of stocks using fixed-income assets, such as bonds or real estate. &nbsp;<\/p>\n\n\n\n<p>The balance that is right for you will not be the balance that is right for your neighbour. <strong>The mix of investments you select should be based on your level of experience, risk, time horizon and overall goals<\/strong>. <strong>All of this differs from person to person and household to household. This mix also changes for the same person over time.&nbsp;<\/strong><\/p>\n\n\n\n<p>The aim of this review is to determine if you have the right balance to achieve short-, mid- and long-term goals.&nbsp;<\/p>\n\n\n\n<p>To help, ask yourself these questions:<\/p>\n\n\n\n<ol class=\"wp-block-list\"><li>Why did I buy this investment?<\/li><li>Does it still fit into my strategy?&nbsp;<\/li><li>What role is it supposed to play in my overall plan?&nbsp;<\/li><\/ol>\n\n\n\n<p>Remember that different types of investments play different roles in your portfolio and may provide varying patterns of risk and return. As you become more advanced, you\u2019ll want to fine-tune the balance and mix of your investments. For instance, does a particular investment or holding give you more exposure to domestic bonds or international bonds? Does it target a particular style of equity investing, like value or growth?<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-evaluate-your-portfolio\"><strong>2: Evaluate Your Portfolio<\/strong><\/h3>\n\n\n\n<p>Evaluate the performance of your portfolio by comparing your stocks, bonds, mutual funds, or ETFs to an appropriate benchmark. The most common benchmark used for Canadian equities is the S&amp;P\/TSX Composite Index. This index tracks large, mid, and small company stocks. For American holdings, you can use the S&amp;P 500. For a list of other good benchmarks, read this <a href=\"https:\/\/www.investopedia.com\/articles\/basics\/06\/benchmark.asp\">Investopedia article<\/a>.&nbsp;<\/p>\n\n\n\n<p>Now, ask the following&nbsp; questions:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>What is impacting the performance of your investment? For instance, what is going on in the world, in the stock market, or in the industry, that affects returns? Keep in mind that different types of investments do well at different times.<\/li><li>How does it compare to others like it?&nbsp;<\/li><\/ul>\n\n\n\n<p>If you are happy with your current investment strategy and holdings, then you\u2019ll need to move on to the next step in the personal finance checklist: To rebalance your portfolio.&nbsp;&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-rebalance-your-portfolio\"><strong>3: Rebalance Your Portfolio<\/strong><\/h3>\n\n\n\n<p>The process of rebalancing an investment portfolio typically involves buying and selling securities in order to <strong>restore your portfolio\u2019s targeted asset allocation<\/strong>. Remember this target is based on your risk tolerance, investment objectives, and time frame.&nbsp;<\/p>\n\n\n\n<p>If you need to determine your portfolio targets, consider these online tools:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Fill out <a href=\"https:\/\/www.vanguardcanada.ca\/individual\/questionnaire.htm#\/\">Vanguard\u2019s Investor questionnaire<\/a><\/li><li><a href=\"https:\/\/mfda.ca\/ipq\/\">Read the MFDA Sample Investor Questionnaire<\/a><\/li><li>Or read <a href=\"https:\/\/www.letsmakeaplan.org\/blog\/view\/lets-make-a-plan-blogs\/what-is-risk-tolerance-and-how-can-i-determine-and-manage-mine\">CFP\u2019s article on how to determine risk tolerance<\/a>.&nbsp;<\/li><\/ul>\n\n\n\n<p>If you own taxable investments that lost money in the last year, consider selling shares <strong>before the end of the year.<\/strong> <\/p>\n\n\n\n<p>Not only does this <strong>free up money to re-invest but you can then use the capital loss to offset taxes owed<\/strong> on capital gains and interest income. Just remember the <strong>wash sale rule<\/strong>: you can&#8217;t sell stock or funds and get then repurchase if you plan to use the loss to offset tax owed. <\/p>\n\n\n\n<p>Suppose you don&#8217;t want to sell any of your current investments but want to change your asset allocation over time. For future contributions direct more money to the asset class you want to grow.&nbsp;<\/p>\n\n\n\n<p>Either way, the overall aim is to bring your investment portfolio back to the balance you\u2019ve identified as right for you. Aside from capitalizing on current gains and future upswings, this action also creates a habit that allows you to maintain your portfolio in a disciplined way.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-4-keep-it-simple\"><strong>4: Keep It Simple<\/strong><\/h3>\n\n\n\n<p>Above all else, however, Prevost reminds us of that simple statement: Keep it simple, sweetheart (KISS)!&nbsp;<\/p>\n\n\n\n<p>\u201cThe more things change, the more they stay the same.&nbsp;The investment industry keeps churning out new reasons to actively invest (usually with \u201cthem\u201d) and passive investors simply keep winning,\u201d explains Prevost. \u201cMake your 2021 portfolio resolution to keep it simple.\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"<strong&gt;review-your-estate-plan<\/strong&gt;\"><strong>Review Your Estate Plan<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"<strong&gt;deadline:<\/strong&gt;-ongoing\"><strong>Deadline:<\/strong> Ongoing<\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>56% of Canadians have a will&nbsp;<\/strong><\/li><\/ul>\n\n\n\n<p>An estate plan is critical if you want to organize your financial affairs and provide for the wellbeing of your family.&nbsp;<\/p>\n\n\n\n<p>There are <strong>three basic documents<\/strong> <strong>that form the foundation of an estate plan: a Will, an Enduring Power of Attorney, and a Personal Directive<\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-get-or-update-your-will\">1. Get or Update Your Will<\/h3>\n\n\n\n<p>Don\u2019t have a will? Then you risk:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Not being able to choose who gets your estate stuff;&nbsp;<\/li><li>Not being able to choose who your beneficiaries will be;<\/li><li>Can\u2019t choose who will administer your estate;<\/li><li>You won\u2019t be able to minimize the taxes paid by your estate (and this could mean half your money going to the taxman);&nbsp;&nbsp;<\/li><li>Lose the opportunity to select a guardian for your children.<\/li><\/ul>\n\n\n\n<p>\u201cIf 2020 taught us anything, it&#8217;s that we have to be prepared for the unexpected, and one of the most important ways to plan for the unexpected is to get a will,\u201d explains Erin Bury, CEO at online will platform <a href=\"https:\/\/willful.co\/\">Willful<\/a>.&nbsp;<\/p>\n\n\n\n<p>\u201cEnd-of-life planning is like life insurance: <strong>It&#8217;s not for you, it&#8217;s for your family<\/strong>. While wills and power of attorney documents may not have been top of your list heading into 2020, we saw people across Canada prioritize these important documents this year,\u201d says Bury. \u201cDid you know you can easily take care of these documents online? Take 20 minutes and check \u2019get a will\u2019 off your list in 2021, so you not only have a will but peace of mind.\u201d&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-get-or-update-your-power-of-attorney-poa\">2. Get or Update Your Power of Attorney (POA)<\/h3>\n\n\n\n<p>A POA is a legal document that gives a person you choose the power to act for you when you are incapacitated.&nbsp;<\/p>\n\n\n\n<p>For example, if you have a stroke and you are unable to speak or move, your POA allows the person (known as the agent) you\u2019ve selected to pay bills and set up financial arrangements while you are healing.&nbsp;&nbsp;<\/p>\n\n\n\n<p>Most POAs are created so that a person you trust can take over for you should you be alive but incapacitated; however, a \u201cdurable POA\u201d remains in force regardless of your medical situation.&nbsp;<\/p>\n\n\n\n<p>In most situations, a POA is used for legal and financial decisions.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-get-or-update-your-personal-directive\">3. Get or Update Your Personal Directive<\/h3>\n\n\n\n<p>Like a POA, a personal directive is a legal document that allows the person of your choice to make personal decisions for you, typically involving healthcare.&nbsp;<\/p>\n\n\n\n<section class=\"wp-block-zolo-related flex items-center py-6 leading-tight border-t border-b border-blacklight undefined\"><p class=\"font-serif pr-6 md:pr-12 mr-6 md:flex-shrink-0 border-r border-blacklight\">Related content<\/p><p class=\"related-link w-full my-0\"><a href=\"https:\/\/www.zolo.ca\/blog\/review-estate-plan\">Three Moments When You Need to Review Your Estate Plan<\/a><\/p><\/section>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"<strong&gt;review-your-insurance-needs-and-coverage<\/strong&gt;\"><strong>Review Your Insurance Needs and Coverage<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"<strong&gt;deadline:-<\/strong&gt;ongoing\"><strong>Deadline: <\/strong>Ongoing<\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>20% of Canadians don\u2019t have life insurance<\/strong><\/li><\/ul>\n\n\n\n<p>When nationally recognized author and financial journalist Kerry Taylor was told she had breast cancer in 2019, she was shocked. You can read about her diagnosis, <a href=\"https:\/\/www.squawkfox.com\/breast-cancer\/?fbclid=IwAR0XzKbjDhW-0S5SJ3j1CHU0ZWdj1mAOQ8Q1oHByFqehKv18nAXaYpaI0xk\">here<\/a> on her blog, and find amazing tools to keep you on track financially.&nbsp;<\/p>\n\n\n\n<p>To be blunt: Nothing can prepare a person for this sort of health shock. But her decision to \u201cdisaster-proof her financial life\u201d meant that even amidst this shocking health event, Taylor could focus on what mattered: Being a mom and a partner while getting and staying healthy.&nbsp;<\/p>\n\n\n\n<p>It\u2019s also why Taylor is a big advocate for regularly reviewing your insurance needs.&nbsp;<\/p>\n\n\n\n<p>\u201cI never thought I\u2019d make a claim on my critical illness insurance policy at a young age, but I needed it after my breast cancer diagnosis. Getting the policy felt terrible, [but when it came down to it, this policy meant] I didn\u2019t have financial stress during the most stressful chapter of my life.\u201d<\/p>\n\n\n\n<p>As a result, Taylor encourages everyone to \u201creview their life, disability, and critical illness insurance needs annually.\u201d&nbsp;<\/p>\n\n\n\n<p><strong>Her pro tip:<\/strong> Most employers offer some insurance benefits.<\/p>\n\n\n\n<p>The idea is to protect your income, even if you or your family face health setbacks.&nbsp;<\/p>\n\n\n\n<p>While you\u2019re at it, it\u2019s a good idea to review your car and house or tenant insurance. Quite often, people don\u2019t realize that over the years, rates go up and coverages change. By glancing through the documentation at least once per year, you\u2019ll know what coverage you have and whether or not to shop around.&nbsp;<\/p>\n\n\n\n<section class=\"wp-block-zolo-related flex items-center py-6 leading-tight border-t border-b border-blacklight undefined\"><p class=\"font-serif pr-6 md:pr-12 mr-6 md:flex-shrink-0 border-r border-blacklight\">Related content<\/p><p class=\"related-link w-full my-0\"><a href=\"https:\/\/www.zolo.ca\/blog\/life-insurance-covid-19\">Life Insurance and Estate Planning in the Age of COVID-19<\/a><\/p><\/section>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"<strong&gt;maximize-earnings-<\/strong&gt;\"><strong>Maximize Earnings\u00a0<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"<strong&gt;deadline:<\/strong&gt;-ongoing\"><strong>Deadline:<\/strong> Ongoing<\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>33% of Canadians either took an employer pay cut or accepted an employer pay freeze since the pandemic started<\/strong><\/li><\/ul>\n\n\n\n<p>Data on the number of jobs we hold is hard to come by both in Canada and the U.S. In America, the best data is from the Bureau of Labor Statistics, which ran a long term study that followed baby boomers through most of their careers (and terminated in 2017). Based on this study, the data shows that people hold 11.7 jobs, on average, between the age of 18 and 48.&nbsp;<\/p>\n\n\n\n<p>Of these, it turns out 27% were prone to hop-around, holding 15 jobs or more, while 10% were more likely to stay at a job and held between 0 and 4 jobs, on average. (To read more, go <a href=\"https:\/\/www.edsurge.com\/news\/2017-07-20-how-many-times-will-people-change-jobs-the-myth-of-the-endlessly-job-hopping-millennial#:~:text=The%20best%20data%20the%20Bureau,between%20age%2018%20and%2048.\">here<\/a>.)<\/p>\n\n\n\n<p>What does that mean for you?&nbsp;<\/p>\n\n\n\n<p><strong>If you\u2019re currently unemployed, it means stay positive<\/strong>. The economy \u2014 and the job market \u2014 will rebound as soon as the pandemic is \u201cunder-control.\u201d For most, that means the use of a vaccine and, by all accounts, there is hope this will be possible in 2021.&nbsp;<\/p>\n\n\n\n<p>It\u2019s also a good idea to <strong>stay open-minded<\/strong>. Whether employed or looking for work, it\u2019s important not to pass up an opportunity just because it doesn\u2019t look exactly as you imagined. Consider whether or not it meets your needs and if it will help you grow professionally. If both of these answers are satisfied, it may be a good idea to consider a change.&nbsp;<\/p>\n\n\n\n<p>For those that can, it\u2019s a good idea to <strong>spend the time reverse engineering your job search.<\/strong> What do you want to do? What do you need in order to get that position? Now, get those skills or the education you need.<\/p>\n\n\n\n<p>For those happy with their current employment, consider ways to maximize your earnings. If your employer is still in a pay freeze, consider <strong>keeping a file to show all the reasons why, when the pay freeze is lifted, you deserve a raise<\/strong>. <strong>Another option is to work on your side-hustle or passion project.<\/strong> Sometimes the best businesses are borne out of a genuine love for doing something. If this describes your side-hustle, then start to examine how you can turn it into a profitable business.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"<strong&gt;<strong&gt;focus-on-you<\/strong&gt;<\/strong&gt;\"><strong><strong>Focus On You<\/strong><\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"<strong&gt;deadline:<\/strong&gt;-ongoing\"><strong>Deadline:<\/strong> Ongoing<\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Prior to the pandemic, 57% of North Americans reported that they were \u201cparalyzed by stress\u201d<\/strong><\/li><\/ul>\n\n\n\n<p>As Katherine Porter, a J.D. executive coach, explained (in the recent <a href=\"https:\/\/www.zolo.ca\/blog\/work-life-balance-tips\">work-life balance tips article<\/a>), \u201crecognize that 2020 was a strange year and cut yourself some slack. Do what you need to do to recharge your batteries.\u201d<\/p>\n\n\n\n<p>From a personal finance perspective, focusing on you means taking advantage of ways to reward yourself, responsibly.&nbsp;<\/p>\n\n\n\n<p>One option is to make use of your employer benefits. This can include stock-matching programs, registered top-ups, and health benefits.&nbsp;<\/p>\n\n\n\n<p><strong>Stock-matching: <\/strong>When a publicly traded company offers a matching contribution for every dollar you spend buying company stock. Whether the matching incentive is 10% or 100%, consider maximizing this reward \u2014 then use a portion of the earnings to buy yourself an end-of-year treat.&nbsp;<\/p>\n\n\n\n<p><strong>Registered top-ups: <\/strong>When an employer will match your contribution to a pension plan, an RRSP or TFSA. Again, free money is free money, so maximize this top-up.<\/p>\n\n\n\n<p><strong>Health benefits: <\/strong>Most companies will offer some sort of health care coverage that includes dental, vision and secondary healthcare, such as a registered massage therapist or dietician. Take advantage of these benefits and use them to help you relax, or establish or maintain a healthier lifestyle.&nbsp;<\/p>\n\n\n\n<p>Finally, a great way to reward yourself is to set-up and meet financial goals for the year. <strong>Achieve these goals and you get the reward. <\/strong>For example, if your goal is to max out your TFSA contribution and you complete this goal by September, then reward yourself with $500 to spend on whatever you want.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"<strong&gt;final-thoughts<\/strong&gt;\"><strong>Final Thoughts<\/strong><\/h2>\n\n\n\n<p>We all know how important money management and financial skills are to our health and well-being, but accomplishing these tasks can feel very overwhelming. Rather than get frustrated and flustered or opt to ignore these necessary decisions, use the personal finance checklist as a way to set up and accomplish regular, ongoing maintenance of your financial tasks.&nbsp;<\/p>\n\n\n\n<p>When needed, don\u2019t forget to seek out professional help, and check out the <a href=\"https:\/\/www.zolo.ca\/blog\/\">Zolo Homebase blog<\/a> for more insight and information.&nbsp;&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-sources\"><strong>Sources<\/strong><\/h3>\n\n\n\n<p><a href=\"https:\/\/www12.statcan.gc.ca\/census-recensement\/2016\/as-sa\/98-200-x\/2016013\/98-200-x2016013-eng.cfm\">Statistics Canada 2016 Census<\/a>, <a href=\"https:\/\/www.zolo.ca\/blog\/financial-literacy-canada\">Zolo: Financial Literacy and Financial Sufficiency 2020 Report<\/a>; <a href=\"https:\/\/www.canada.ca\/en\/revenue-agency\/programs\/about-canada-revenue-agency-cra\/income-statistics-gst-hst-statistics\/tax-free-savings-account-statistics\/tax-free-savings-account-statistics-2017-tax-year.html\">Tax-Free Savings Account Statistics from StatsCan<\/a>; <a href=\"https:\/\/www.canada.ca\/content\/dam\/cra-arc\/prog-policy\/stats\/t1-filing-compliance\/2017\/t1-cmp-tbl01a-2017-en.pdf\">Statistics Canada T1 Filing Compliance<\/a>; <a href=\"https:\/\/www.everydayhealth.com\/wellness\/united-states-of-stress\/\">Everyday Health\u2019s United States Stress Report, 2018<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>End 2020 strong and go into 2021 with these practical, actionable money management tricks and tips<\/p>\n","protected":false},"author":3,"featured_media":16921,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[46],"tags":[],"guide":[],"class_list":["post-16824","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"acf":[],"zolo_excerpt":"","_links":{"self":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/posts\/16824","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/comments?post=16824"}],"version-history":[{"count":12,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/posts\/16824\/revisions"}],"predecessor-version":[{"id":20035,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/posts\/16824\/revisions\/20035"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/media\/16921"}],"wp:attachment":[{"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/media?parent=16824"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/categories?post=16824"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/tags?post=16824"},{"taxonomy":"guide","embeddable":true,"href":"https:\/\/www.zolo.ca\/blog\/wp-json\/wp\/v2\/guide?post=16824"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}