At the start of the new year, I always have great intentions for the year ahead and that includes setting financial goals. This is especially important for 2023, due to the challenges of the past year. Debt levels have climbed to near all-time highs, rates have continued to inch higher to combat inflation, and the housing market remains a wildcard. Households are having to make tough choices as spending has been reduced and there is a feeling of treading water financially speaking. Given so many households are living so close to the margin, it would be unreasonable and unrealistic of me to simply say “set some goals and go out there and achieve them.” Therefore, in 2023 I’m shifting gears from financial resolutions to financial resiliency.
Not everyone enjoys managing their money and, like me in the kitchen, are making mistakes that could prove costly. You can’t change the past, but you could learn from these mistakes and refocus your efforts going forward. November is Financial Literacy Month and here are the top 10 financial lessons I’ve learned in life: 1) Sitting on cash for too long. In today’s environment, having cash on hand is a good thing and taking a cautious tone when it comes to investing is prudent. However, your return on this investment, even in a rising interest rate environment, is minimal when factoring in taxes and inflation.
It has been tough to watch your portfolio crumble with stocks and bonds all headed lower, inflation remaining stubbornly high, and central banks all around the globe raising interest rates. And while you have zero control over how the markets will perform, nor can you single handily beat down inflation. Even if you think the Bank of Canada may overshoot on interest rate increases. Once again, that is out of your control.
