How to Gain Financial Confidence

January 8, 2025

It’s a new year and a chance to reevaluate - to gain control and satisfaction in areas of life needing improvement. Financial health, and confidence, is one of those areas and to gain financial confidence one needs to understand their current standing and create a plan forward. This can be accomplished in four steps.

Step 1, Understand your Cashflow

The number one thing that brings people financial stress is cashflow management. Worrying about having enough money to pay bills, debts, and save for the future... it can get overwhelming.

To overcome this, sit down and map out your current cash flow – where your money is coming from and going. Understanding is power – it shows you exactly how things are, and it will reveal opportunities for positive change.

Many times, it’s not the large purchases but the small ones that are the problem.

Step 2, Define your Goals

Goals = motivation. What are you aiming to improve?  What to manage your cashflow better? Are you saving for something (A house, retirement, vacation, paying off debts)?   Whatever it is, create a goal for it. A SMART goal:

SPECIFIC - State a clear target or area you want to improve.

MEASURABLE - Create a method of tracking your progress - to mark both your successes and note any areas needing improvement.

ASSIGNABLE - Who is doing each task to achieve your goal?

REALISTIC - Your goal must be achievable given the resources you have. Take into consideration not only your monetary resources but also your knowledge base. Do you need help? If so, where will you find it?

TIMELY - When will you achieve your goal - set a date.

Step 3, Develop a Long-Term Plan

Now that you know your cashflow, and set your financial goals, it’s time to decide how you’ll meet your goal. Accomplishing financial goals requires tools and strategies – which ones are right for you is determined by your needs and preferences.

This is the point where consulting financial experts may be necessary – especially your wealth advisor. They can help refine your goals and determine which tools work best for you moving forward. They will also advise if other professionals are needed to execute your plan such as a tax preparer or lawyer.

Step 4, Regularly Assess Your Progress

You should be more confident at this point – you’re far ahead of many of your peers. It’s now important to maintain this feeling by regularly reviewing your plan.

Life isn’t linear, which is why any good plan should be reassessed annually or when a life event occurs (i.e. new job, big purchase, windfall, new baby, etc.). This will allow for adjustments to be made before unwittingly steering off course. Adjustments can include changing strategies, tools or goals to adapt to new circumstances. Once you’ve gained confidence, make sure you hold onto it.

To discuss your SMART goals or plan, contact KLT Wealth Management.

- Courtney Beach, QAFP

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