Finance Look for “easy wins” No doubt about it: for those who pay great attention to detail, have an eye for bargains and financial nerves of steel, volatility can mean opportunity and be a great way tomake a significant amount of money in a very short period of time. But let’s face it: most of us aren’t cut from that cloth. During volatile times, most of us are looking to reduce financial stress, not add to it. We want to make easy decisions, not challenging ones. We’re looking to simplify our finances (and our lives), not make them more complicated. Which is why, in times of volatility, it makes sense to take care of the financial “easy wins” before you start tackling the harder stuff. Have some unused room in your TFSA? Maxing out your contribution room and sheltering more of your income from tax is an easy win. Got some high-interest credit card debt, or a car loan, or even a mortgage that’s been kicking around for a while? Paying it off (or at least, a good chunk of it) is an easy win. Don’t have a long-term financial plan? Taking the time to determine your goals and come up with a plan for achieving them (or hiring someone to figure it out for you) is an easy win. If you’re like most people, there are likely a few “easy wins” out there that could make a difference to your overall financial situation in volatile times. Taking advantage of them before you start digging into stock market analysis or complex trading strategies is just common sense. Make luxuries temporary To some snowbirds, retirement is that time in life when we treat ourselves to luxuries which we’ve put off, or otherwise denied ourselves for most of our lives. During “normal” times, we’d be fully supportive of such an attitude. During times of volatility, however, it makes sense to reconsider this approach…at least for a while. One good way to do this is to make luxuries and similar discretionary spending “temporary.” That is, instead of spending money on material possessions and luxuries that last for a long time − a new car, a cottage by the lake, a complete home renovation − spend it on experiences, special treats and smaller luxuries that give you a taste of the good life without requiring you to ante up for them over and over again. So, instead of buying a brand-new European luxury car, for example, go out for a three-star Michelin meal. Instead of buying a lakefront cottage, rent one for a couple of weeks. Such trade-offs allow you to live modestly most of the time, while not “denying” yourself the good life that you’ve earned. That way, you can still enjoy life, but also retain maximum financial flexibility, just in case worse turns to worst. CSANews | FALL 2020 | 33
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