When it comes to finances, boring works
Why Smart Financial Planning Isn’t Boring (And How It Can Save You From Eating Instant Noodles Forever)
Let’s face it: financial planning often feels like eating your vegetables. You know it’s good for you, but you’d rather binge-watch Squid Games while pretending money grows on trees. The good news? Getting your financial house in order doesn’t have to be as dull as counting calories. In fact, once you see the benefits, you might even enjoy it. Here’s why you need to set up or track these key financial tools, with a sprinkle of humor to sweeten the deal.
1. Have Liquidity for 3-6 Months of Expenses
Imagine this: your car breaks down, your dog swallows a sock (again), and your boss announces company-wide layoffs. That’s three disasters in one week! Having 3-6 months of expenses stashed in a savings account means you’re prepared for life’s little or big(COVID) curveballs.
Think of this fund as your financial "get out of jail free" card. Without it, you’re one unexpected expense away from Googling “how to sell a kidney on eBay.” Trust me, having that cushion is cheaper and way less dramatic.
2. Know Your Net Worth
If you don’t know your net worth, you’re flying blind. Your net worth is like a report card for your financial life, except you don’t have to show it to your parents. It’s simply the difference between what you own (assets) and what you owe (liabilities).
Tracking your net worth helps you spot trends, like “Wow, my student loans are shrinking faster than my pants after holiday dinners” or “Hey, my investments are growing like weeds… the good kind!” It’s motivating, illuminating, and, dare I say, kind of fun.
3. Set Up Auto Contributions for RRSP, TFSA, FHSA, and RESP (If Applicable)
Automation is the lazy person’s secret to success. Setting up automatic contributions to your RRSP, TFSA,FHSA, or RESP ensures your money is working harder than you are on a Monday morning.
Picture it: every payday, a chunk of your income goes straight to your future self without you lifting a finger. It eliminates the temptation to blow that money on a 75-inch TV you definitely don’t need.
4. Set Up Annual Increases in Contributions
Do you give your savings a raise every year? You should! Setting up annual increases in your contributions is like putting your financial growth on autopilot. Even a small bump (say, 1% more per year) can add up to a retirement fund big enough to fund your dream of slipping down South everytime it’s -30. The best part is, you won’t notice.
And let’s be real, when was the last time your property tax didn’t increase? If they can sneak in an extra charge, so can you—except this time, it’s for your benefit.
5. Track Your Expenses, Including Subscription Services
Remember that free trial you signed up for two years ago? Yep, still charging you $12.99 a month. Tracking your expenses reveals what shows what you value and what’s just draining your wallet.
From the “everyday” (groceries) to the “extras” (streaming subscriptions, delivery apps), a good tracking system gives you clarity and control. Bonus: You’ll finally have an answer to the question, “Where does all my money go?” Spoiler: It’s probably lattes and Amazon.
At the end of the day
Financial planning doesn’t have to be scary. By setting up and tracking these key financial metics, you’ll save yourself from future headaches (and possibly a lifetime supply of instant noodles). Plus, you’ll sleep better knowing you’ve got a solid plan in place.
*ChatGPT may have been used in developing this article