We covered a lot in 2023 – from budgeting and paying down debt to forming good financial habits, addressing inflation, discovering new ways to save, and much more. With so much valuable information throughout the year, it might be a lot to digest. If you missed our posts or prefer a quick crash course, we’ve compiled it all in one place: 52 of the most important lessons we learned – one for each week of the year. Enjoy, and here’s to a fantastic 2024!
- Have one main SMART financial goal for 2023 and stick to it no matter what: The post suggests setting a clear, specific, measurable, achievable, realistic, and timely goal for your personal finance and following it throughout the year. This can help you improve your financial situation and achieve your desired outcomes.
- Cryptocurrency and Bitcoin are risky investments: The value of these assets can fluctuate wildly in a short amount of time, and there is no guarantee that you will see a return on your investments. You should only invest money that you can afford to lose and research any cryptocurrency before investing. In other words, treat it as fun or gambling money and don’t invest more than 5-10% in it, unless your investment style is high risk, high reward, in that case you can go in with more.
- Pay Yourself First (PYF): This is the habit of saving or investing a portion of your income before spending it on anything else. It is a powerful way to build wealth and achieve financial stability.
- Junk to Health to Wealth: In this post, I reflect on a previous commitment to cut down on junk food spending and saving that money instead, resulting in both health and wealth benefits.
- When looking for vacation packages, start looking at least 3-6 months out: this will help you get an idea of the prices and availability of your desired travel destination, and also give you a chance to catch early deals and promotions.
- Budgeting is essential for financial well-being. Budgeting is not only a way to save money, but also a tool to achieve one’s goals, reduce stress, and improve one’s quality of life.
- Keeping spare change can be a strategic defence against unnecessary spending. Using coins for smaller purchases creates a psychological barrier, preventing the need to break larger bills. This practice cultivates mindful spending habits, reinforcing the idea that smaller denominations are meant for minor expenses, fostering better financial discipline.
- Personal growth and development is a holistic process. It involves not only what you think, but also what you eat and who you surround yourself with. By adopting healthy habits, positive thinking, and supportive relationships, you can create a better version of yourself.
- Recognize the unsustainability of spending habits and take proactive steps to control expenditures. Emphasizing the risk of debt and bankruptcy, the advice underscores the importance of budgeting for essential purchases, avoiding high-spending environments, diligently tracking expenses, and seeking alternative means to fulfill wants and needs.
- Create win-win situations in your life. By doing more with less, you can improve your finances, personal growth, and happiness. Find ways to use your time and resources efficiently and effectively, and reap the benefits of multiple outcomes.
- Use compounding to grow your money faster. Compounding is the process of earning interest on interest, which can multiply your money in less time. Albert Einstein called it the eighth wonder of the world. You can take advantage of compounding by saving and investing your money in accounts that offer high interest rates and reinvest your earnings.
- To achieve financial independence and wealth accumulation, you must transition from solely saving money to actively investing. While investments offer the potential for greater returns, it’s crucial to decide on clear investment goals, start with a manageable amount, choose the right platform or brokerage, and carefully consider various investment options, even as a beginner.
- When it comes to getting a tax refund, prioritize strategic financial moves. Consider options like contributing to your RRSP for a potential larger refund next year, paying down significant debts, saving for a big purchase or goal, donating to a charity for a dual benefit, or enjoying it responsibly if all financial bases are already covered. The key is to carefully assess your financial goals and allocate the refund wisely, creating a plan that aligns with your priorities.
- Read books to build your wealth and knowledge. Reading helps you connect the dots, generate new ideas and unlock potential that you didn’t think was possible
- When you find yourself with extra money in your budget, whether from paying off debts, a raise, or reduced expenses, consider prioritizing charitable giving, debt repayment, or saving and investing. Instead of increasing your standard of living, elevate your standard of giving or build a foundation for financial freedom by allocating this newfound money wisely. The impact on others or your financial future will far surpass fleeting indulgences.
- Use technology to save money and time. Technology can help you manage your finances, compare prices, automate your investments, and create side income. But be careful not to spend too much money and time online. Use the digital tools wisely and you will be richer and happier.
- Cultivating positive financial habits, such as saving money, tracking expenses, and investing consistently, is the key to long-term financial success. Utilize the power of habit formation by starting small, automating savings, and seeking accountability. Building wealth is a gradual process, requiring patience and dedication, but the consistent practice of good financial habits can pave the way for a secure financial future.
- Recognize and break free from addictive habits formed during the lockdown era, particularly with apps like TikTok and UberEats. Conduct an inventory of your app usage, identifying time and money leaks, and take concrete steps to address the issue, such as setting limits or removing the apps altogether. Reclaiming your time and money from these addictive platforms is crucial for developing healthier habits and avoiding the negative consequences of excessive screen time and spending.
- Plan ahead and shop smartly. To combat inflation at the grocery store, you should plan your meals in advance, make a list of what you need, and stick to it. You should also compare prices, use coupons, buy in bulk, and avoid impulse purchases. This way, you can save money and reduce food waste.
- Adopt a proactive approach to saving for significant future expenses. Start early and break down large financial goals into smaller, manageable targets.
- Learn from your mistakes: Establish a feedback system that helps you identify, analyze, and prevent financial errors. This will enable you to improve your performance and achieve your goals.
- Use your credit card rewards wisely: You can use your cashback or points to get ahead financially, such as buying RRSP, TFSA, or other savings products. But make sure you pay your balance in full every month, otherwise the rewards are not worth it and you are using them wrong.
- Write down your goals. This simple act can increase your chances of achieving them by 42 percent, as proven by science. Writing down your goals helps you commit, plan, and focus on them. It also signals to your brain that they are important and worth pursuing. So grab a pen and paper and start writing your way to success.
- First step to stick to a budget, is to create one in the first place! Without a budget, you have no idea what is coming in and out, and therefore, are likely spending more than what you have coming in.
- Prioritize paying off high-interest debt first to break free from the interest trap. By focusing on reducing the principal balance of debts with the highest interest rates, you can accelerate your progress and regain control of your financial well-being.
- Transforming clutter into cash is a beneficial and rewarding practice. By regularly assessing and selling unused items, you not only make extra money but also create valuable space in your home. Prioritize decluttering in less-explored areas, utilize online platforms, and remember that the value of creating a more organized living space extends beyond the financial gains.
- Don’t go cold turkey on your spending habits. Instead of making drastic changes to your lifestyle, start with small steps and gradually build momentum toward your financial goals. This way, you will avoid feeling deprived and discouraged, and you will enjoy the journey more.
- Do your research before buying a big ticket item. Compare prices, features, and long-term costs of different options. This can help you save money and get the best value for your purchase.
- Don’t worry about a recession. The more you think and talk about it, the more likely it will happen. Instead, focus on living your life and spending wisely. This will keep you hopeful and help the economy stay strong.
- Outsource to yourself: You can save a lot of money and time by doing things at home that you usually pay for outside, such as working out, making coffee, or shaving. This way, you can enjoy the convenience and quality of your own home services, while also reducing your expenses and increasing your savings.
- Be proactive about your credit card expenses. Anticipate and allocate for any recurring or annual charges that may surprise you and jeopardize your budget. Review your credit card statements, cancel unnecessary subscriptions, and mark your calendar for future payments. This way, you can take charge of your financial destiny and reduce your credit card debt.
- Lastly, mark your calendar or create a list with the dates of these monthly, quarterly, or annual charges to eliminate future surprises. It’s one thing to anticipate and allocate for these charges, but it’s even better when they’re not unexpected.
- Teach the difference between needs and wants: Children often confuse what they need with what they want, and may demand things that are not essential or affordable. Explain to them the difference between needs (such as food, clothing, shelter, education, health) and wants (such as toys, games, candy, entertainment, etc.).
- Start teaching your kids about money early on. This will help them develop good financial habits, understand the value of hard work, and appreciate the difference between needs and wants. You can use practical examples, household tasks, piggy banks, and charity to make the lessons more engaging and meaningful. Just be careful not to dwell on money too much. The idea is to teach them the value of money and not to make it some taboo topic.
- Be prepared for rising interest rates. If you have a mortgage or other debts, you should review your budget, explore alternative payment options, and seek professional advice to avoid financial stress. You can also take advantage of high-interest savings accounts to grow your money.
- Be proactive and creative in your job search. Don’t just rely on traditional methods like job boards and resumes. Instead, use non-traditional strategies like cold outreach, reverse engineering your resume, and leveraging social media to find and connect with potential employers. This will help you stand out from the crowd, discover more opportunities and find that dream job faster.
- Take advantage of high interest rates on savings accounts. If you have some money that you don’t need right away, you can lock it in a one-year GIC and earn more than 5% interest, which is much higher than the average stock market return. This way, you can grow your money without taking any risks or worrying about market fluctuations, at least in today’s high interest environment.
- Frugality is not only for the poor, but also for the rich. Practicing financial discipline and avoiding wasteful spending can help you invest more wisely and grow your wealth over time. Frugality is a mindset that can benefit anyone, regardless of income level. If the rich are doing it, then it is a good idea to take notice, as it is surely helping them preserve their wealth and even increase it.
- Don’t reinvest all your dividends forever. If you have spent decades building a passive income stream from dividends, you should enjoy some of it and not just keep reinvesting it. Otherwise, you may miss the opportunity to live the life you want and achieve your financial goals.
- Drive your old car as long as possible. You can save a lot of money by avoiding new car payments and high interest rates. As long as you maintain your car well, you can enjoy its service for many years and kilometres. Just because your friends are driving Teslas, BMWs and Mustangs, doesn’t mean you should too.
- Communicate and compromise with your partner about financial matters. Financial differences can cause conflicts and threaten relationships, so it is vital to find a middle ground that works for both of you. Discuss your financial goals, create a budget that respects your individual spending habits, and celebrate your financial achievements together. This will not only improve your financial stability, but also your relationship harmony.
- Develop a positive mindset for financial success. Personal development can help you adopt a set of beliefs, attitudes, and habits that promote financial well-being and success. You can’t expect to be financially free in a number of years, if you are not willing to set goals and make some sacrifices in the presence.
- Treat your money like a child: Communicate clearly, repeat your goals, and reward yourself for good decisions. This will help you develop a healthy and productive relationship with your finances. Money, like a little baby, like to be pampered and cared for.
- Track your spending and income. This will help you see where your money is going and how much you are earning. You can use apps, spreadsheets, or journals to record your transactions and analyze your cash flow. This will help you identify areas where you can save more, spend less, or earn more.
- Find your ‘why’ and use it as a motivator. Having a clear and compelling goal in life, especially one related to financial freedom, can help you overcome any challenges or frustrations that you may face. Instead of letting them drag you down, use them as fuel to work harder and smarter towards your ultimate vision.
- Invest in a home gym. Having a home gym can save you money, time, and improve your health and well-being. You don’t need expensive equipment or a lot of space to create your own fitness routine at home.
- Be a Meticulosumer: Before making a big purchase, try to find reasons not to buy it. This will help you avoid wasting money, regretting your decision, and compromising your financial future. Most people are the opposite, finding even the silliest reasons at times to buy what they want.
- Save more, spend less: Treat any salary increase as money you never had and allocate it to savings or existing budget categories instead. This will help you avoid immediate gratification and build a secure financial future. If you never get to see it, there is no pain in letting it go to better use.
- Be smart with your money: In today’s high inflation reality, don’t just pay whatever price the retailer sets, especially if it is significantly higher than what you used to pay. Choose to buy less or find alternatives, and save your money for something else. This will also help you avoid unhealthy food and live a better life.
- Review your net worth, savings, and debt annually. These are the key indicators of your financial health and progress. By comparing them to the previous year, you can see how well you managed your money and what areas need improvement. You can also identify any hidden expenses and make smart cutbacks to save more and reduce debt. This will help you achieve your financial goals and be prepared for the future.
- Save money and enjoy the psychological benefits. Saving money is not only good for your financial well-being, but also for your mental health. It can boost your happiness, confidence, and sense of control over your money.
- Saving money triggers the release of dopamine, the brain’s reward and pleasure neurotransmitter, making it a joyous and addictive activity. How cool?
As you reach the end of this post, we hope your mind is now a canvas painted with inspiration and possibilities, poised to turn your aspirations into achievements in the upcoming year. Share your thoughts and plans for a fantastic 2024 in the comments below – we’d love to be a part of your journey!