Expect the Unexpected in Life: An Insurance Blog

I want to put everything into perspective for you now.

Life isn't about having the most money, or the coolest posessions (though I do like those mine), or having that "status" that comes along with making lots of dough. Life is about living and being happy to be alive.

In the world we live in we are told to buy buy buy all over the place. Everywhere you look is an ad. Easy credit applications help us fulfill our need and desire to have the latest and greatest right now versus when we can actually afford it. This makes it very easy for people to spend all that they make or even more than they make. Now I'm no angel here I get sucked into this too. I do do the "no payments for however long" and if you do this right then it's a decent option. Right means paying the balance before you get charged all the built up interest.

It's hard to be happy when you owe people money. Even though you may have all the things you want you still won't be happy because you have a huge stress in having to pay it all back...or it keeps growing and growing.

I've been reading Personal Finances for Canadians for Dummies. If you have any interest in getting out of debt or making the most of your income you should pick it up. I bought it because I'm going to be taking my CFP (Certified Financial Planner) starting in May and I needed something to fill in the gaps for me.

As I've been reading it I've been looking at my own finances and making a list of stuff to do. Here's what I'm going to do:

1. Reduce spending (live within my means...the hardest thing to do in our society)

2. Pay down consumer debt (any debt for consumption ie. car, credit cards, etc.)

3. Start an emergency savings account (3 months of income)

4. Start contributing to tax-free investments (RRSP and TFSA, started this early)

5. Pay down good debt (Both of our student debts)

6. Taking my debt payment amounts and turning it into savings.

7. Get life & disability insurance so I don't borrow from my savings if something happens. (already have Life)

8. Live off my own money and save to buy things that I want (living within my means.)

9. Increase my income

By paying off debt first I'm freeing up all of the money that has gone into paying the debt down. Starting a savings account to use instead of my credit card will allow me to make those I want it now purchases and it won't cost any interest. The rest of the money that I don't put towards my personal savings account (or monthly spending allowance) I will use to max out tax-free investments.

Once I've got my tax-free investments maxed I will start investing in non-registered (taxable investments) I will then use the income and growth from this investment to fund my tax-free investments.

Make sense?

Go over the checklist for yourself and find out where you're at and what you should be doing to gain financial freedom! A large weight will be lifted off of your shoulders just as I know one will be lifted off mine.

Until next time! Hopefully it's sooner :P

Mike Hamilton