According to a 2018 survey by Tangerine, 69% of Canadians make new year’s resolutions, and of those, 32% plan to improve their financial health. Of the Canadians that make money-related resolutions, 45% want to spend less, 41% aim to save more, and 31% intend to pay down credit card debt.

Making resolutions is a positive first step, however it’s long-term habits that lead to good financial health. According to David McGann, Director of Tangerine Investments, “this means thinking of your money year-round and making small, realistic improvements versus a lofty or vague one-time goal at new year’s”.

Indeed, of the financial resolution-makers, only 55% kept their resolutions for the whole year.

We’re therefore going to look into simple tricks and tips that can help your clients achieve their financial goals.

Resolution 1: Spend Less

To help your clients spend less throughout the year and not just in January, it’s essential you rigorously assess their finances with them and create a year-long budget that’s aligned with their earnings.

Keeping to a budget, however, is like being on a diet, your clients may start off full of enthusiasm, but resolve can start to wain when faced with temptation. So, here are some simple hacks to help your clients stay on the straight and narrow:

• If they’re tempted to splurge, have them work out how long it would take to earn that money – realizing that it would take five hours to pay off one pair of boots can be a good motivator to put the credit card away.
• Get them to do their grocery shopping online – the running total shown is an easy way to make sure they’re not overshooting their budget.
• Encourage them to pay themselves a set amount in pocket money that they keep in a separate account or take out as cash each week – that way the rest of their money is out of sight and out of mind.

Resolution 2: Save More

Once your clients have their spending under control, they may be able to start saving. Whether it’s to create an emergency fund or build a retirement nest egg, there are simple habits that they can employ alongside their budget to help them achieve their saving goals.

• Have them round up every purchase and put the extra into savings. This can be done with both cash and card transactions as many banks offer you this option with the extra sent directly to your savings account.
• Encourage them to set up a direct debit from their chequing account to their savings account right after payday. This way, they don’t run the risk of forgetting or prioritizing other expenses.

Resolution 3: Pay Down Credit Card Debt

As you know, credit cards have among the highest interest rates and having large amounts of credit card debt can wreak havoc on your clients’ financial health. A strong budgeting plan that cuts out unnecessary expenses and sets aside enough each month to make the minimum payments is therefore essential.

Consider the CHIP Reverse Mortgage

Another option for your 55+ clients is to consolidate their debts using the CHIP Reverse Mortgage.

This allows your clients to access up to 55% of their home’s value in tax-free cash. They can then use this money to pay off any credit card debt, and because the CHIP Reverse Mortgage has an interest rate of 4-7% compared to the 12-23% of credit cards, your clients will save a lot by consolidating.

With the CHIP Reverse Mortgage your clients make no monthly repayments and only pay back what they owe once they leave their home. And once they’ve paid off their debts (credit card or remaining mortgage) with their reverse mortgage funds, they can spend the remaining funds on whatever they want.

Heading into a new year in poor financial health can be stressful for your clients, however with your advice and a clear plan, they’ll be able to reach – and exceed – their financial goals.

How have you been helping your clients achieve their financial new year’s resolutions? Let us know in the comments.