Set GOALS and set up separate ACCOUNTS for each one

Why I chose this topic:

Using one account for all your goals makes it difficult to keep track of your finances.

Whether they write them down or just have them in their head, everyone has personal and financial goals. Why not make your financial goals easier to achieve by setting up separate accounts for each goal.

Experiences I have seen with some of my clients:

Over the years, I have had many clients not have the sufficient savings when it came time to needing money, so therefore they borrowed money and went more into debt. You will hear me talk a lot about debt accumulation and the reason is, I have seen far to many people in debt for reasons that could have been prevented. I.E I had a client put over $5000.00 on a credit card because they didn't have the money for their Hawaiian vacation. These clients also had no plan on paying it off in the short term. The credit card they had was 18% interest, which can really add up over time. This type of debt can easily build and build and the interest costs can get out of hand.

My personal experience:

Continuing on with the example above, my husband and I like to travel at least once every year or so. What I do is I break down how much I will need for that trip and then I set up a SEPARATE account to make sure I have the funds available prior to the vacation. I then put money into that account each payday to make sure I have enough savings at the time of the vacation.

- First we figure out WHERE we want to go and WHEN.
- Second we decide for HOW LONG i.e. 1 week, 2 weeks, one month etc.
- Third we do some research to find out the COST to go to that specific place for the length of time we want.
- Forth we then take the amount of money we need and divide it by the number of paydays we have to SAVE. We then set up a SEPARATE account and put money aside each payday.
- Lastly we decide if the amount we need to save per month is FEASIBLE and if it's not then we ADJUST our goal. I.E. maybe go somewhere cheaper, go for a shorter amount of time, or go later so we have more time to save.

For example: Say we want to save $5000 and our trip is in 18 months that would be about $420/month, or $210 per cheque if your paid twice a month.

I know this seems pretty basic and easy, and really it is! The reason I bring it up is very few of the clients I have met over the years have set up a travel account. Believe me it makes things easier if you use your own funds or at least have MOST of it saved and borrow none or very little.

Tips and Options:

A) Have an account set up for trips (if you like to travel)

B) Have an account set up for emergencies and put money away each month. This one is a topic all on it's own, and VERY important. Things happen and we need to be prepared so we don't have to ask family/friends for money or borrow and go more into debt. What if your car needs a major repair, or your furnace breaks down, or you lose your job. I truly feel everyone should have an emergency account. How much you put in it depends on so many variables, so I won't go into full detail in this blog.

C) Have an account to save for your maternity leave. I did this, as it meant we lost my income for one year. It really helped to replace some of my income while I was home with my daughter.

D) Have an account set up for retirement plans, for your child's education etc etc etc.

F) Have an account to save up for the down payment of that house or that vehicle. The more you have saved the lower your house or vehicle loan/mortgage will be and the less interest you will pay.

E) Sit down and look at some of your short term and long term goals and set up a plan!

F) If you don't have a plan then you can; borrow the money, ask friends/family, or save up last minute which may or may not be an option depending on your income and expenses at that time.

Above are just a few examples, everyone has different goals, depending on their wants and needs.

The option for putting away the savings may just be a bank account. It may also make more sense to set up an investment account. Look at talking to a Financial Adviser in person to help you set up a plan.




JS.