Sensing a theme?
There’s no surprise here. “Saving money” follows close behind the perennial champions “lose weight/quit smoking” for New Year’s resolutions by Canadians.
But just like so many other goals, we often give up in frustration long before reaching the objective. The biggest reason: taking on too much too fast. If you want to lose weight, don’t try to go from couch-surfing and nachos to marathon workouts and all-broccoli diets overnight. Very few people can quit smoking cold turkey. And most people aren’t going to be able to cut their spending in half and start maxing out their RRSPs if they were living paycheque-to-paycheque.
The secret to success? Start small.
I’m only now coming back from nearly three years of physical inactivity due to injuries. I’ve lost a lot of muscle and put on a lot of weight. If I tried to jump right back in to where I was at my physical peak I would very likely re-aggravate my injuries and set myself back another six months or more. Instead, I’m taking it slow, and getting help. I’ve been meeting with a physiotherapist and a personal trainer to help design an exercise program that is appropriate for where I am today, and gets me started on the path to my short- and long-term goals.
So if you’ve never considered your long-term financial plan and haven’t started saving for retirement, here’s your first step: $25 a month into a TFSA. Put it in a 50% equity/50% income balanced portfolio fund.
You’re not going to retire rich on $25 a month, but it’s a start. That’s the real key here. Get comfortable with the money going out. Don’t pay too much attention to the account (so it doesn’t become a temptation to withdraw). Just let it run on auto-pilot for a few months. Then we’ll look at the next step. It might be increasing the deposit to $50, or opening an RRSP. It might be cleaning up your budget to pay off debt faster. But don’t try to do it all at once.
Good luck in 2012!