New Year Financial Checklist Items


Out with the old, in with the new some say. That said, whatever is old can also be new again with our valuable new year financial checklist items – to start your 2022 personal finance journey off right!

Budgets are good but monitoring your cashflow is better in any year!

While budgets are good we’re not really fans of them here on this site – we prefer to you monitor your cashflow often and there is no better way to find out where all your money goes than to use our free cashflow budgeting spreadsheet.

In fact, if you sign up for our free email newsletter, you’ll get your own free cashflow spreadsheet to work with and be notified when new content is posted. You’ll also get exclusive content only made available for our subscribers.

Back to the “B” word, it’s easy to understand why so many personal finance experts recommend budgeting: it can be an easy solution to a set of complex issues. For many people, budgeting can be similar to dieting. You might be told by some finance guru to “create a budget” but that’s not really helpful – just like “starting to diet” probably won’t last. The language around budgeting and dieting are similar, they are judgy words. We don’t believe in budgeting or dieting because of this judgement and because ultimately we feel cashflow management (just like eating a more balanced diet) is likely going to yield much more positive results.

Budgeting doesn’t work for most people because it can leave many people feeling worse about themselves – that’s hardly the right mindset for positive change. Instead, use tools like ours to find out where your money is going and see if those types of spending patterns align with your values. Obviously, spending less than you make is a must for any wealth-building but if you don’t know where you are starting from, then you’ll have little clue how to change.

So, this year, toss the budgeting concept out the window. Monitor your cashflow and make better decisions with it. Grow the gap for investing purposes, when it makes sense.

Consider investing this new year

While true, if you’re not investing, you could be missing out on valuable stock market gains, the reality is maybe you shouldn’t be investing at all – yet.

We outlined a few great reasons why you may wish to consider putting investing on hold until you get part of your financial house in order.

Further Reading: When should I start investing?

If you feel comfortable with your finances and cashflow management, then by all means try to start putting some money aside towards your investment accounts as soon as possible. The sooner your money can get working for you, with the proper conditions, with time on your side, the more wealth you can potentially build.

Alternatively, maybe you’re focused initially on creating an emergency fund. We’re fans of that too. To help you out, consider reading through the following link for some of the best savings rates in Canada.

Further Reading: These are the best high-interest savings accounts to own. 

We believe the money that you save in an emergency fund should be liquid – you can easily dip into it when you need it. That includes when your favourite stocks or ETFs go on sale! That brings us back to investing in this new year.

Contribute to your Tax-Free Savings Account (TFSA) this new year

You might already know by now that a Tax-Free Savings Account is not just a savings account. Thankfully, the account can hold stocks, low-cost Exchange Traded Funds (ETFs) and more. The beauty of this account: all the gains you make insight the account are tax-free.

The TFSA limit for 2022 is $6,000, per adult, and contribution limits are now up to $81,500 since account inception! That’s a lot of tax-free money!

Assuming you have the contribution funds available, we believe it makes great sense to strive and max out your TFSA contributions in January to get your money compounding away early and throughout the year.

A big reminder we’ve actually written a few comprehensive posts about TFSAs so you can take full advantage of its power over time!

Everything you need to know about TFSAs – including the TFSA contribution room is here.

Do you know if you invest wisely within your TFSA, you can retire on just that account?

Can you retire using just your TFSA?

Contribute to your Registered Retirement Savings Plan (RRSP) this new year

Regardless if you prioritize your RRSP over your mortgage, or if you invest in your TFSA before your RRSP – the facts are – saving and investing inside your Registered Retirement Savings Plan (RRSP) remains one of the best ways to fund your retirement.

Essentially, anyone who files an income tax return and has earned income can open and contribute to an RRSP. There are limits on how much you can contribute to an RRSP each year.

You can contribute the lower of:

  • 18% of your earned income in the previous year (see above in our example), or
  • to the maximum contribution amount for the tax year.

We’ve written hundreds of words about RRSPs in everything you need to know about RRSPs here.

We’ve also got some great case studies about how much wealth you can build via your RRSP(s), and how to retire wisely with those RRSP assets:

Rebalance your investments this new year

If you have an investment portfolio, and you’re not investing in some simple all-in-one index funds, you may want to consider the new year as a great time to re-balance your portfolio – if that has strayed from your target asset allocation.

You may also want to consider juicing any income needs as well, via dividend ETFs or other investments:

New Year Financial Checklist Items Summary

As you can appreciate, there is a lot of ground that any new year can cover. So, we believe you should keep your new year financial checklist items rather short to avoid paralysis by analysis. To keep you focused on organized:

  1. Revisit your cashflow management, and grow the gap between income earned and expenses where possible.
  2. If you have a gap, consider investing, when it makes sense based on your debt management plan.
  3. With any gap, consider investing inside your TFSA, first, at the start of any new year, and when that TFSA (or TFSAs are maxed out with your partner), then
  4. Consider investing inside your RRSP for further wealth-building and max out that contribution room in the first few months of each year.

Certainly, revisiting Wills, life insurance needs and revisiting other personal finance matters is very important in any new year. But, we know from our own experiences you can’t do it all nor should you try. So, start with these new year financial checklist items and build from there. That includes tackling any wealth preservation plans to get any future retirement income planning right.

We hope you enjoyed these new year financial checklist items and see you on the site in 2022!

Looking for help?

If you’ve already been investing for some time, and/or just want to know if you’re on track to meet any long-term goals including semi-retirement or retirement – we can help!

Through our retirement projections services, we’ve helped dozens of clients with these questions recently and we’re back this year to help dozens more in our low-cost service-model for all Canadians to take advantage of. We answer complex questions such as:

  • Do I have enough to retire?
  • When can I retire?
  • Will I run out of money in retirement?
  • How much can I spend in retirement?
  • How much of a financial legacy can I leave behind?
  • Should I take CPP at age 65 or 70?
  • How do I minimize OAS clawback?
  • Which account (and when) should I withdraw from for the highest tax efficiency and estate value?
  • and more!
We are offering these services because we feel, essentially, we can help Canadians in a major way. We founded Cashflows & Portfolios to help offer up our time and expertise to Canadians when it comes to DIY early retirement, semi-retirement or full-on retirement preparation. There is simply a HUGE gap between fee-only planners who advise folks vs. folks who simply want some personal confidence in their own retirement projections. We know! As passionate Do-It-Yourself (DIY) investors, we know the hard part really isn’t about investing or asset accumulation any longer with all the tools, services and resources available to Canadians. The challenging part is really about solving the asset decumulation puzzle. That asset decumulation puzzle is a process that is often very personal and must be tailored to your specific retirement or semi-retirement needs and goals. We know about that too – we’re working through that process ourselves right now!
Many financial advisors will typically charge between $1.5k – $11k for a financial plan or require that you invest through them and charge a percentage of your entire portfolio. By using our intake process and our services, we offer personalized retirement projections for a fraction of the cost. We also have no desire to manage any investors’ financial assets (and we do not provide specific investment advice), so we avoid that conflict of interest!

With Cashflows & Portfolios, we work with you, take your inputs, your assumptions, then work on providing you with an optimized Retirement Projections Report(s) that is customized to your needs and goals.

If you are interested in participating in a case study, money coaching session(s), and/or obtaining private projections for your financial scenario to answer questions like “how much will I have in retirement?”, please contact us here to get started.

We look forward to helping you out in 2022 and beyond!

Mark and Joe

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