In the interest of full disclosure, I love new beginnings – a new year, a new job, a new goal. A fresh start to me is exciting and challenging, yet it can also be a little overwhelming.
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.
2022 has been difficult for many households. Debt levels have climbed to near all-time highs, rates have continued to inch higher to combat inflation, the markets have been extremely volatile, and the housing market remains a wildcard.
As Canadians, we used to talk about the weather. We now discuss the high price of just about everything. 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. Why? Because being resilient is exactly what is going to be required of us in 2023. Resilience is the process and outcome of successfully adapting to challenging life experiences and adjusting to external and internal demands.
I’m often asked if I think we are headed toward a recession. And my response is always the same: maybe. If inflation remains high, higher rates will be required, and the economy will slow even more sharply. If this happens it will be a challenging second half of the year. But we have a choice! We can stand around idly waiting for it to happen or we can become more resilient and recession-proof in our life.
The time to take charge is now!
Financial Resiliency Strategies
My acronym for financial resiliency is MONEY. The next year will be about how we save, spend, and generate money.
M – Manage: You need to have a plan and manage the money you have with precision. You have time to get to know your numbers. Your plan for the next year will act as your road map and requires a financial destination, otherwise how can you take corrective action if necessary? Your plan needs to be based on your financial facts with enough financial flexibility to try and live for today while tucking a little away for tomorrow.
O – Options: If you are barely treading water, financially speaking, grant yourself permission to explore every option. Reach out for professional help. Experts in debt management can negotiate with creditors on your behalf. In some cases, stop the interest clock from ticking and even get a temporary moratorium on payments with some creditors. There are those who may decide to talk to family or friends seeking temporary financial relief while others may explore a reverse mortgage, especially if they have equity built up in their home. The goal here is to explore every option available to provide you with some financial flexibility. The savvy person will ask for help. In fact, if you have any questions about the CHIP Reverse Mortgage, you can call 1-866-758-2447. It isn’t for everyone, but it might be the right product for you.
N – Needs versus wants. Resiliency is having mental, emotional, and behavioural toughness to make the right choices at the right time for your household. It isn’t about being right or wrong, it is about surviving a difficult time. Many have told me they have stopped dining out, started shopping in their closet, downsized their home and changed how they shop at the supermarket. Looking for deals, using coupons, and going meatless a couple of days a week while also reducing waste are just a few ways to save money. Of course, there are many more. Look closely at where you are spending your money. Cutting back in small ways can lead to big savings.
E – Earnings are key. Many retirees have opted for part-time work, while others have delayed retirement. Create multiple earning streams, such as a reverse mortgage that allows you to get money out of your home without having to sell your house or make monthly payments. Those who have an investment portfolio of dividend-paying stocks are being paid by way of a dividend. It is all about generating earnings. Earnings provide you with financial flexibility and help you to be financially resilient.
Y – Yes; Make 2023 the year of saying YES. Yes to new opportunities, adventures, and lifestyle decisions. Regardless of what is going on in the economy, if you have financial resiliency, or shall I say some MONEY, you know you will get through the year with a positive attitude and maybe a few new life experiences.
When I reflect back to the start of the pandemic, we were fearful for so many reasons. While the world was shut down many experienced a little financial freedom for the first time. We weren’t spending, we were saving, and we felt resilient. As the world opened up and we eagerly anticipated that life was returning the normal, pent-up demand exploded, leading us to where we are today. A little nervous, uncertain, and financially strapped once again.
We have weathered worse financial storms in the past. My challenge for 2023 is to be financially resilient.
How? By exploring all of my options when it comes to managing my finances. I hope you join me on this journey this year!
If you’d like to hear me speak with Marilyn Denis about how to achieve your financial goals this year, watch now!
Pattie – PLR@heb.ca
