Plan for Success and Overcome Debt: Bromwich+Smith's Guide to Securing Your Financial Future
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By Bromwich+Smith Staff | 1149 words | Reading Time: 5 minutes and 45seconds | Date: 2023/08/15
In an unpredictable world, managing your finances can be a difficult thing to wrap your head around. With increased interest rates being announced more often than we would like to hear it is no wonder that there are thousand of Canadians struggling with their debt and filing for insolvency every month. Debt can easily accumulate, and without a secure plan in place, it can feel like there will never be an end. We are here to assure you that while your debt may seem endless now there are things you can do today to start managing your finances to get back on track.
Review Your Current Financial Situation:
The first step towards financial success and often overlooked step is to understand your current financial position. This starts with our favorite task- creating your budget! Start with your income- any money going into your account through employment, alimony or child payments, benefit credits etc. Then review your expenses, and debts. Expenses are the things you expect to come out of your account each month, and while some like rent are the same every month many are variable. Your utilities likely vary each month, or some bills only come out yearly or quarterly and not monthly- don’t forget about these when you are reviewing your budget! The second step is to allow yourself to make adjustments. By reviewing your budget often, and altering as needed you will set yourself up for success. For example if you spend $100 more this week grocery shopping, where is that money coming from? Without adjusting your budget, you may put something onto a credit card which will cost you more in fees and interest later on.
By understanding what your budget looks like, you can now review your debts and savings. If your budget has a deficient, you need to look at where to cut back or add to income to make up the difference. If you have a surplus, Congratulations! You can take a look at your savings, or your debt and decide how to allocate the additional money. Putting money into savings especially when you are paying off debt is important. Recent studies show more than 50% of Canadian households are within $200 of not being able to pay their monthly bills. Without an emergency savings, an unexpected bill may put you in the same position.
Set Realistic Financial Goals:
Start by setting both short-term and long-term goals. Short-term goals could include paying off a specific debt or saving a certain amount of money, while long-term goals might involve purchasing a home, retiring comfortably, or starting a business. Remember to make these goals obtainable, otherwise you will be defeated and deflated when you ultimately can not reach the goal. Knowing how much money you have to pay down debt is a good start to setting a realistic goal. If you have a monthly surplus of $500 you can start to knock down your lowest debt fairly quickly and use your minimum payment plus your surplus to start on the next debt. Reward yourself at these milestones! Once you have accomplished a goal, pat yourself on the back, do a happy dance, go for an ice cream- celebrate the win and get ready for the next challenge!
Build an Emergency Fund:
Life is full of unexpected surprises, and having an emergency fund is crucial to protect your financial stability. Set aside a portion of your income each month to build an emergency fund. Aim to save three to six months' worth of living expenses. This fund will help in those surprise bills, job loss, medical emergencies, or major home repairs.
Seek Professional Advice:
Navigating the complexities of debt and financial planning can be challenging, especially if you're feeling overwhelmed. Bromwich+Smith offers professional debt relief services to guide you towards a debt-free future. Their experienced team will assess your unique situation, provide tailored solutions, and support you every step of the way.
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Invest in Your Future:
Once you have established a solid foundation by paying off debt and building an emergency fund, it's time to focus on long-term financial planning. Explore investment opportunities that align with your risk tolerance and goals- and those will be different for everyone. Consider consulting with a financial advisor to ensure you make smart financial moves. Make sure you are comfortable with the person you choose to help you manage your money. This relationship is built on trust, and it is your money on the line. Look at reviews, references and never feel guilty about choosing to work with someone different. If your current advisor isn’t supporting you in the way you need it is ok to find someone new who can support you.
No matter your current financial situation or stage of life, taking control of your finances and planning for the future is essential for long-term success and stability. Often, the journey is not always easy, but with dedication and determination, financial freedom is within your reach.
Reach out today for a free, confidential, no obligation consultation. Bromwich+Smith’s Debt Relief Specialists are available by phone at 1.855.884.9243, or request a call back at contact us page.
FAQs:
1: How can I start managing my finances and get back on track?
Review your current financial situation by creating a budget, analyzing income, expenses, and debts. Regularly adjust your budget to make necessary changes and avoid relying on credit cards for unexpected expenses.
2: What are some tips for setting realistic financial goals?
Start by assessing your monthly surplus and allocate it towards paying off debts. Set achievable short-term goals like paying off specific debts or saving a certain amount of money. Celebrate milestones to stay motivated.
3: Why is building an emergency fund important, and how much should I save?
An emergency fund safeguards your financial stability for unexpected events. Aim to save three to six months' worth of living expenses. It provides a safety net for surprise bills, job loss, medical emergencies, or home repairs.
4: When should I consider investing for my future, and how do I choose the right financial advisor?
Once you've paid off debt and built an emergency fund, focus on long-term financial planning. Explore investment opportunities aligned with your goals and risk tolerance. Consult with a trusted financial advisor who fits your needs and preferences.
5: What steps should I take if I have a budget deficit?
Identify areas to cut back on spending or explore ways to increase your income. Look for non-essential expenses that can be reduced. Creating a clear plan to address the deficit will help you stay on track.
6: How do I determine my risk tolerance when considering investments?
Assess your financial goals, time horizon, and comfort with market fluctuations. A higher risk tolerance might allow for potentially higher returns, while a lower risk tolerance might prioritize stability over returns.
7: Can you provide examples of short-term and long-term financial goals?
Short-term goals could involve paying off a credit card or saving for a vacation, while long-term goals might include buying a home, funding retirement, or starting a business.