2013 New Year’s Financial Planning Resolution

2013Financial Tips for 2013

Happy New Year, hope all of you just had a wonderful holiday!  After a relaxing vocation to Hong Kong, I guess I better start planning for the year 2013. As I’m working through my own financial plan, I figure below are some ideas that might be useful to you.


Reduce Debt:

  • I hope you didn’t overspend during the Christmas holiday. If so, you should pay off your debt asap, especially the ones that charge high interest. (i.e.: Credit cards, consumer debt.). You could consider consolidating all your debts into one that charges the lowest interest. Usually, loans with collateral would charge lower interest. (i.e.: Mortgage)

Savings Plan:

  • As I talked to many people, I noticed that a lot of them did not get into the habit of saving regularly. They say they would save when there’s extra money left, which usually would be none after their spending. Whenever there’s an inflow of money, consider setting aside first. Set up an automatic contribution plan, so you would not be tempted into overspending.
  • Registered Retirement Savings Plan (RRSP): It is still one of the best vehicles to save and invest. Contributions are tax-deductible, while money is shelter until you withdraw them. Deadline for the tax year 2012 is March 1st, 2013.
  • Tax Free Savings Account (TFSA): Advantage of having your money saved or invested within the TFSA is that all income earned are non-taxable. Although, contributions are not tax-deductible like the RRSP, withdrawal from the TFSA would not have any taxation impact. This year, the contribution limit for 2013 has raised from $5,000 to $5,500. If you never made any contribution to a TFSA, you are eligible to contribute up to $25,500. Even though, the name is Tax Free “Saving Account”, contributions are not limited to cash only, you could invest mutual funds, stocks, bonds, GICs, and some other investments into it.
  • Registered Education Savings Plan (RESP): If you haven’t started saving for your child’s education, perhaps, this should be on the list of your New Year’s Resolution. By opening a RESP, your contribution might bring government grants. Even without contribution, depend on your family income, your child might be eligible for government bonds.

Review Your Insurance Needs:

  • Mortgage, car payment, debt, groceries, utilities, property tax, clothing, childcare and many other expenses might all depend on your ability to work. If your family lose your ability to bring in income, how are they able to maintain the same living standard? If you have a goose that lay golden eggs, will you insure only the eggs and not the goose? Review over your health & dental benefits, disability insurance, critical illness insurance and life insurance policy. Is your current coverage provides enough coverage to your family?


It is important to write down the details of your plan, so you could always review them at a later date. Many people failed their New Year’s Resolution from time to time. Therefore, I advice you to set realistic goals and find someone accountable to review over your plan periodically.


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