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MONEY$TYLE: Be Ready For The New Year

How to get your finances in order for 2018…

Canada’s celebration of its 150th anniversary has now drawn to a close and there is lots to look forward to in 2018 and beyond. Before you know it, it’ll be summer again, and we will be knee-deep in Pride events across the country.

A year in review would suggest that 2017 started with much uncertainty but ended positively for the financial markets, the real estate industry and the overall Canadian economy. Because our economy does change from time to time, it is very important to adapt your financial strategies to determine whether a defensive or offensive approach should be adopted. Approach the new year with optimism, while acknowledging potential headwinds.

We continue to recommend that you make a plan and stick to it. That plan will depend on a number of factors, including your stage in life. For many, the question for 2018 will be whether to increase their assets (go on the offensive) or reduce their debt (defensive strategy). No matter what you are aiming for, remember: your life plans should drive your financial plan, not the other way around!

Trends for 2018
A continuing trend that will impact Canadian households is the rising interest rate—it was increased twice in 2017 and is expected to increase further. This is one reason you may see many Canadians focusing on debt reduction.

Tracking helps with planning
In our article in the previous issue (November/December 2017), we recommended the use of credit cards such as the TD Cashback or TD Aeroplan card instead of cash, to take advantage of all the bene ts they offers during the holiday season. A great complement to that is the TD MySpend app, which reduces the heavy lifting when it comes to tracking your expenses, because it is essential to have historical data when making a budget. This app sorts all trans- actions from your bank accounts and credit cards into categories, and highlights when you are spending above or below your average.

Accelerate debt pay-down
You may have multiple credit products such as a mortgage, a car loan, line of credits and credit cards. So, which one should you focus on if you want to increase payments? A rule of thumb is to focus on those with higher interest rates, smaller balances, or exible lending terms such as a line of credit (in case an emergency comes up and you need some of that cash back). In other words, have access to credit but get rid of your debts. It all depends on your personal situation. If you have very little savings and investments, for example, then it’s best to start by creating an emergency fund before getting aggressive with your debt repayment.

Make 2018 a success
Without good implementation, good plans are just that—plans. We have all made fantastic New Year’s resolutions in the past—and we’ve all been there when “the wheels fall off” because we didn’t execute our goals properly. (I’ve been trying to learn Spanish for the past five years!)

If you don’t want to suffer the same fate, it’s best to create some accountability for yourself. Meet with a certified financial planner who can create a customized plan based on your unique circumstances. You can start by doing your homework and complete the simple and easy-to-use Self-Discovery tool on TD’s Financially Fit site: https:/

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