January 21, 2022

5 Financial Resolutions for 2022

Happy New Year! As you reflect on your plans and goals for the year, at Northfront we highly recommend our clients also set some financial resolutions. Financial resolutions are especially important as they set you on the road to financial freedom. That’s the end destination!

Here are 5 Financial resolutions for 2022 that you can consider:

Talk to your partner about money

If you have a partner, it’s so important to talk about money periodically. Having a quick monthly check in, and quarterly or semi-annual detailed reviews will go a long way to making sure your both on the same page. Items to review include your budget, asset allocation, and investment performance. Also, talk about your life and disability insurance coverage and make sure you have a solid estate plan with all necessary documents in place.

Apart from budgeting, investments and insurances, talk about your big picture financial goals. You can discuss your income outlook and goals for the future, and where you’d like to spend the money – be on the kids, future holidays, or other items. Be sure to also talk about your short term savings and emergency funds. The few years have shown, life can be unpredictable!

Take advantage of tax-advantaged savings accounts

To deal with pandemic expenses, governments at all levels are likely to be dipping into your pockets to pay for those. As an investor, it is in your interest to take advantage of all the tax savings vehicles available. Be sure to take advantage of plans like the TFSA (Tax-Free Savings Account).

Luckily for you, the total room contribution has increased since 2009, and thus the accumulated total contribution room from 2009- 2022 would now be $81 500. Your contribution room starts accumulating from 2009 or from whatever year you became 18. Therefore, if you end up opening a new TFSA in 2022 and do not have a TFSA anywhere, you have a total available contribution room of $81,500, if you were already 18 or older in 2009. With your TFSA, you could invest in stocks, mutual funds, exchange-traded funds, bonds, and not only money market funds.

Protect your investment against inflation

Going into 2021, inflation is a hot topic. Higher inflation is a tax on your savings and investments. In an inflationary environment, reviewing your asset allocation is critical. If you own a portfolio of stocks and bonds, there are some steps you can take. First, review your bond exposure. Within bonds, shorter term bonds are less sensitive to rising interest rates, relatinve to long term bonds. This is called keeping our “duration” short. You can also consider additing alternative assets such as real estate and infrastructure to your portfolio. Alternative assets can add more stability and consistent inflation protected cash flows for your portfolio Northfront Financial, specializes in providing individual investors with exposure to a wide range of alternative assets.

Learn more about money

Learning never stops, and its always a great idea to increase your financial knowledge. Some of the books you can consider are:

“The Psychology of Money” by Morgan Housel.

“Raising Financially Fit Kids” by Joline Godfrey

“The Millionaire Next Door” by Thomas Stanley”

“Total Money Makeover” by Dave Ramsey

“Why Didn’t They Teach Me This in School?” by Carl Seigel

Review your relationship with your financial advisor

It’s always valuable to review the relationship with your financial advisor. Review the investment performance and service you receive.

If you do not work with an advisor and feel you could benefit from professional advice, search for a trustworthy and experienced financial advisor with a proven track record. Check that their services align with your values and goals. Know if they are aligned with insurance firms or financial institutions that may conflict or negatively influence their financial advice for you.

The start of the year is the time you make decisions that’ll influence the trajectory of the rest of the year. One smart financial decision now may have you beaming at your progress at the end of the year and one not so smart decision.., well, let’s hope you don’t make one. Welcome to the new year. Now, start making plans that’ll get you to financial freedom!

About Northfront Financial

Northfront Financial, based in Calgary, Alberta is a boutique full-service financial planning firm serving professionals and business owners. We pride ourselves on being a different kind of investment firm. This stems from our humble roots, entrepreneurial spirit, and a culture of integrity and professionalism. Our goal is to offer the best investment products, services, advice, and ideas the financial industry has to offer from our experienced team, which includes individuals with the Chartered Financial Analyst® (CFA®), Chartered Investment Manager (CIM®), and CERTIFIED FINANCIAL PLANNER™ designations. 

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