Well here we are in 2011 already. December and the Christmas season whizzed by, but along came the credit card debt for all the gift buying done.

When it comes to your finances let’s start 2011 on a positive note–let’s approach our personal finances with a different take on the list of New Year’s resolutions.

Here are the top 10 factors
that will enable you and your family to be financially successful. These tips are invaluable because they come from experience working with real clients like you and I. Real people and families have increase dtheir net worth making great progress towards a future of financial independence because they’ve taken control of their money.

Top 10 Personal Financial Recommendations for 2011


  • 1. Have clearly stated financial goals. For example: A time frame for retirement within 5 years. Or the extra specific amount to put on the mortgage on the anniversary date.
  • 2. Taking regular time to attend to your finances. Remember you will never find time but will instead make time. This also includes being organized in your financial paperwork. For example if you have group life insurance do you know how much your benefit is? If not would it take more than 5 minutes to locate that information?
  • 3. Differentiating between wants and needs. We have been trained to be a very impatient, trend following society. However, patience is rewarded in financial planning. Need a way to distinguish between wants and needs? Generally speaking, wants are often tangible depreciating items that tend to take up a lot of your day to day spending. Needs are often intangible appreciating assets. Therefore it is often easier to put off NEEDS and attend to WANTS.(See #5)Here’s an illustration: After a new home purchase the homeowner needs new furniture. Should he delay getting life insurance because he would prefer to buy the furniture first? If the homeowner has any close relationships with people who could benefit from homeownership then the answer is no. He is protecting the appreciating house with a need( life insurance). It takes a lot of intestinal fortitude(guts) to swim against the crowd but it is definitely rewarding.
  • 4. Having a hands-off savings account for emergencies. Saving ahead for a big purchase or vacation. See #3. Again those companies marketing instant solutions have a bad answer: the credit trap. Having an emergency fund will enable you to withstand such events as a slowdown in the economy, loss of income, or an increase in interest rates. You can bet that those homeowners in the US who have savings are doing better financially that those that lived paycheque to paycheque.
  • 5. Avoiding procrastination. For example how quickly do you do your tax return? When do you return my email or phone call?
  • 6. Knowing how you spend your wages every month. Do you know where you money goes on a monthly basis? You stand a better chance of having money left after expenses if you keep track of them.
  • 7. Knowing which services are worth paying for, especially bank and credit card fees. Paying a monthly fee for an account that has $0 is one of many reasons the bank is richer that you think.(That TV commercial is playing mind games with the public). Try to be the bank’s worst customer because no matter if they make thousands or one dollar off of you they will still keep you on hold for up to an hour when you phone to ask about your money.
  • 8. Making time your friend not your enemy. See #2 and #5. If debt controls your budget then time is your enemy. If debt including mortgage payments are more than 35% of your total gross income that is too much.
  • 9. Understanding that good or bad financial decisions will have an exponential or additive impact on all of your finances. Just as these 10 factors are necessarily interrelated so are the decisions you make for better or for worse. Hopefully for the better!
  • 10. Taking communication seriously. The most financially successful are the ones that communicate regularly with their respective stakeholders their partner or spouse, their financial people, for example.

And there you have it, the top ten financial decisions that will actually help you in 2008 (and any other year for that matter).

About the Canadian Dollar

A little word on our loonie. 2010 was the year for the Loonie that saw it break the parity barrier numerous occasions and sit above the USD for weeks on end. Beyond the headlines of shoppers headed south for bargains there were other implications of our beefed up currency.

First of all the loonie is one of the strongest appreciating currencies against the US dollar. Investors who have foreign holdings have seen the returns on those investments adversely affected in the short term.

Since the price of oil is denominated in US dollars those provincial governments that have resource based economies are negatively affected. Manufacturing is also affected.

Many factors contribute to a strong currency. One important factor is how many institutional investors find that currency attractive. Right now fewer investors are wanting to buy the US dollar which is why it has decreased in value. Countries with strong GDP and low inflation will tend to have stronger currencies.

Over the long term fluctuations in currencies tend to even out. It is unproductive to make changes in your portfolio because of short term movements in the financial market.

Long story short, 2011 will continue to be the year of recovery for the US and Canada. USA will see their housing market crawl back, but growth will be stalled until mid-2012. Canada on the other hand continues to mount higher consumer debt, but they may find themselves in a better position economically than their Southern neighbors since they were never as hard hit during the 2008 plunge.

Regardless of the economy on the outside, there are some basic financial things you can do to ensure they you’re protected, or at least shielded from the nonsense that goes on around us. Save your money, be smart, and good luck in 2011!