What are you saving for?

By Amanda Ainsworth If you couldn’t make it to our most recent event, Money Matters, I hate to tell you but you truly missed out! An evening with Tracy Theemes was all I needed to get my money-saving, ladder-climbing butt in gear!

For me, the most valuable takeaways came in two parts: Tracy’s methodical approach to identifying your goals and achieving financial freedom and her behavioural tips to help every women work their way to the top of their careers.

Below you’ll find Part I: Tracy’s 5-Question Technique for Financial Decision Making. I hope you find these as valuable as I did; stay tuned for Part II: Tracy’s Behavioural Tips next week!

Tracy’s 5-Question Technique for Financial Decision Making

Q1. Where am I now?

How do you know what financial position you’re in once all the smoke and dust clears? Here are two things to calculate and track:

  1. Net Worth— Calculate it every six months: Net worth = your Assets – your Liabilities
  2. Cash Flow — Track your spending pattern over a 90-day or six month period. Use your online debit and credit statements or the plethora of online apps/websites (such as Mint.com) that will do it all for you.

Q2. Do I have reserve?

Reserve is simply a liquid “backup”, preferably kept in a high rate savings account, meaning you can take it out as cash in under 24 hours. Keep cash (or cash equivalents) in your reserve.

The amount of reserve money you should have will depend on things like occupation, for example someone in the film industry might need more than someone with a predictable and dependable income, and your other spending patterns.

When should you start building this reserve? Umm, right now! A good base is to calculate how much money you need to cover your costs of living for three months.

Being your own bank is not only cheaper, it creates financial freedom, confidence and happiness.

Q3. Where am I headed/What do I want?

Pick the 2-3 most important things to you right now (hint: one of these should be your reserve from Q2, if you haven’t already reached your margin)

Then ask yourself, how much does it cost?

And, when do you want it by?

Q4. How am I going to get there?

 These are the years to learn (and practice) positive new behaviours. So skip that latte, pick up an extra job if you need to and attend one of Tracy’s investment classes – they’re free! Contact us if you want to hear about upcoming sessions.

Q5. How am I going to monitor my progress?

Fluent with Excel? Even if you aren’t, it’s a great tool for tracking your budget and financial goals, Use it!

Define what would be “success” for your financial goals and remember to track your progress!

So, what are you saving for? Share with us in the comments below and stay tuned for Part II next week!

Money Matters is Soon!

Money Matters is just around the corner!  This coming Wednesday, Tracy Theemes will be at our disposal to answer all your burning questions about anything and everything finance.  It’s a casual and conversational evening, and because of that, feel free to send us topics or questions that you have an interest in hearing about (or bring them to the event!) on Wednesday. Make sure to sign upsoon before registration ends! E-mail us at info@ywib.ca , tweet at us @YWiB, or post on our facebook page to make sure Tracy will cover what you’re most interested in!

Tracy Theemes is down-to-earth and great at boiling down the complexities of money matters into easy-to-grasp concepts.

Some topics she has on her list:

  • How to save money effectively and general good money habits to adopt
  • What is “asset allocation” and why should we know about it?
  • What are registered versus non-registered accounts?
  • Investing – The various investment vehicles out there and which ones are “the best”
  • Fees & Commissions – how much of your money is actually being invested?
  • How do you assess your acceptable investment “risk” level?
  • Mutual funds – What are they!?
  • RRSPs – When is the right time to start?
  • Filing your tax returns – Best practices for separating your taxes owed and making sure you don’t spend that money that isn’t yours!
  • What do landlord/property management companies take advantage of renters?
  • What to look out for the first time renter/buyer
  • Fixed versus variable rate mortgage
  • Staying out of the “red” with your credit

If, at the end of the evening, you feel you want further explanation or guidance, you’re welcome to have a quick chat with her.  But, while she can’t come home with you, you can definitely pick up her book,The Financially Empowered Woman: Everything You Really Want to Know About Your Money.

We hope to see you there!