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7 steps to nurse your finances back to health

May 6 – 12 is National Nursing Week in Canada, and to do our part, we  have put together a 7 step plan to nurse your finances back to health. ( Cheesy, I know, but this IS a finance blog after all. We also encourage you to thank the nurses in your life for all the good work they do.) Step 1: Establish (or review) your financial goalsWrite them down. Trust me, it makes them seem more real, and achievable. Are you saving for a down payment on a house, a new car, a vacation, or for your retirement. Remember to include timeframes with each goal. Step 2: Get organizedGet your paperwork in order> Whether you set up a drawer in a filing cabinet, a portfolio for receipts or create subscribe to an online financial management service like Mint.ca or Wasabi, you want to have  a good system in place to keep track of your income, expenses and goals. Step 3: Work out your current financial positionTo get a good snapshot of your current household position you want to calculate your net worth. Net worth is the difference between the value of everything you own and the total of all your debts – or in financial speak, your total assets minus your total liabilities. To calculate your net worth, download and use this great net worth calculator from Squawkfox. Step 4: Set up (and follow!) a budget I know I know. Budgets scare people. But budgeting doesn’t have to be complicated. There is no need to plan or record every last dollar or cent – unless you want to, and some people do. A budget is simply a plan, a guideline. A map to reach your financial goals. There are lots of great budget worksheets available online.  My favourite is from Gail Vaz Oxlade (of TVs Till Debt Do Us Part). Download the Excel version and you can modify it to meet your needs. Step 5: Understand your financesRegularly review your bank statements, credit card bills and other correspondence to stay aware of how much cash you have coming in and how much is going out. Step 6: Find ways to cut costsJust brainstorm. Write down 3, or 5, or 10 ways you can save a few dollars. How about making your lunch instead of eating out, and ditto for your morning coffee? Clip and use coupons. Reduce your energy bill with energy saving light bulbs and appliances – and by turning things off when not in use. Saving a few dollars here and there can add up over time, and bulk up your savings account. Step 7: Start saving – or increase your savingsYou cannot overestimate the peace of mind that comes with knowing you have a little money squirreled away for a rainy day. The best way to save money is to plan for it. Make it automatic by having 5-15% of your paycheque automatically deposited into a savings account before you can spend it. Related posts:3 simple steps to household budgeting Simple Household Budgeting Strategies This November marks Canada’s first Financial…Starting the year off right – with a realistic budget Monday we talked about various financial resolutions you might make,…How much money will you need to retire? This week is Financial Planning Week in Canada and National…Savings – the first step to investing well There’s a great article in today’s Globe and Mail entitled…How much do I need to contribute to my retirement savings? Well, between some pre-planned travel and conferences, and an unplanned…Tagged as: budget, financial goals, net worth, saving, statements Share & Bookmark This Story! Bookmark on Delicious StumbleUpon Google BookmarksTip’d

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