We are on the cusp of a new year and it’s the perfect time to set your financial resolutions for 2018.

Here, I try to walk the talk.

Every year during the holiday period we review our net worth statement. I mean, every year.

Maybe it’s not the most exciting activity over the holidays, but it can be the most rewarding. Taking the time to list everything that you own and determining if there is anything that you owe highlights where there are opportunities to set your financial goals for the next year.

We have done this exercise every year since the first year we were married – Feb 25, 1995. Furthermore, we still have every single one of them in a file.

It isn’t sophisticated and it doesn’t have to be. In fact, some years we have been known to do simply a back-of-the-envelope calculation.

The results have proven to be insightful.

Keeping all of the documents year after year has enabled us to see in a concrete way the financial progress we have made. It has forced us to look into areas where we could have done better.

However, the highlight is that each year we proved to ourselves we were better off than we thought. Some years the focus was paying down debt, others it was to save more and in some cases we just had to tighten things up and not spend as much on things that we realized didn’t really matter.

And the real benefit – it got us talking about our life, our goals and how we were going to build financially to make them happen.

With so much focus on the debt levels of Canadians, some may want to ignore determining their net worth. Especially if you owe more than you own.

By confronting your financial facts, as difficult as it may be, allows you to take control of your financial situation and not allow your debt to take control of you.

By looking closely at each line on your balance sheet you might identify opportunities to help you improve your financial position this time next year.

Here are four questions to ask yourself:


  1. If you have debt, look at how much it’s costing you in terms of the rate you are paying. Is there an opportunity to consolidate at a lower rate? If so, that means more money in your pocket.

  2. Is your money working as hard for you as your work for it? If you are sitting in cash and earning next to nothing, explore options to earn a better rate of return. Consider moving up the risk curve – that might mean investing in corporate bonds, mutual funds or even the stock market if you have a longer-term horizon for the money.

  3. Are you saving enough? If you received a raise in the last year, or were lucky enough to get some sort of bonus, what did you do with the incremental increase? Did you blow it? Sometimes your financial goals come out of the questions you ask.

  4. Are there opportunities to use tax sheltered plans such as RESPs, TFSAs or RRSPs to save while reducing your tax bill?

I guarantee if you go through this exercise and take it seriously in a detailed sort of way, you will be in a better financial position this time next year. Remember having even a little less debt this time next year is a step toward building up your net worth, and that is something to celebrate.

Cheers and Happy New Year!