financial strategies

Strategic or Target Based Planning

Financial planning methodologies have evolved over the past 30 years with the advent of increasing computational power. Originally, planning was a simple spread-sheet based projection of your current situation, plus some assumptions, such as savings rates, tax rates, investment returns and inflation rates. This would give you an idea of what your final destination would look like with much of the calculations being driven by Future Value and Present Value tables.

Financial Resolutions for 2013

Give your finances a boost this new year. Here is a list of financial resolutions to help you become better off at the end of the coming twelve months:

Eliminate personal debt. - Brad and Angie had fallen into the very common habit of buying lots of 'stuff' with their credit cards and soon were carrying a balance from month to month. At 19.9%, it is very expensive to live this kind of lifestyle. And any new purchases attract the same financing charge from date of purchase.

An Ideal Opportunity to Improve Your Cash Flow

With so many doom & gloom news headlines, it is refreshing to know Canadians can still get very low fixed rate mortgages. A recent Financial Post article (March 9, 2012) explains that with big banks competing strongly for new mortgage business, now is a great time for Canadians to refinance their mortgages to improve personal cash flow.

These Financial Mistakes Can Cost You

Some financial decisions get made without enough thought given to the long term consequences. Here are some financial mistakes you can avoid:

Mortgage amortized too long:

With lenders offering 30 year amortization periods, it may look attractive to go with a smaller monthly payment to get into a larger house, but the extra interest charges only benefit the lender.

Budget Your Way to Financial Independence

For the book The Millionaire Next Door, researchers asked the question, 'Do you know how much your family spends each year for food, clothing and shelter?' Almost two thirds (62.4 percent) of the millionaires said 'yes.' Only about 35% of non-millionaires said they did, even though they are high-income earners.

The millionaires also budgeted very carefully for savings and most save 20% or more of their gross income. Few save less than 15%. 'Why save so much,' you ask? Quite simply, for emergencies, opportunities and to provide future income.

New Years Financial Resolutions

Jack and Diane want to improve their financial situation and feel that making financial New Years resolutions and implementing them is a good start. To help identify their priorities, they made the following list:

Set Objectives - Goal setting is the foundation of achieving financial success. If they write down their goals, it will help Jack and Diane clarify them and establish their personal and financial priorities.

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