The London Olympics are over, but the accomplishments of all the athletes, including the medal winning performances of Canadians Rosie MacLennan, Ryan Cochrane and the women’s soccer team, will continue to inspire us for quite some time.
I’d like to use this month’s column to salute our Olympians and also draw some lessons from their success that we can apply to our finances. Yes, I believe the kind of planning, dedication and hard work displayed by Olympic athletes is just what it takes to win financial gold, too. So, here are some financial tips `a la the Olympic games.
1. Define your goals
Olympic athletes start out by focusing on a key sport they want to excel in and a goal they want to reach – then direct all their training, time and energy towards that goal. Apply the same principle to your finances by clearly defining your financial goals. Once you know your goals, you will be in a better position to work diligently towards accomplishing them.
Generally, there are four areas to choose from when defining your goals. For some, it may be improving how you manage your money. Others may want to save more. Perhaps you want to grow your money, or better protect it. Instead of aiming for all these areas at the same time, determine the one goal that is your top priority right now. Then set specific targets, such as putting aside enough savings to last three or four months, or living within a pre-determined monthly budget. Once you hit your target, you can focus on your next goal.
2. Get the right tools
Even if you’re as talented as Usain Bolt, your gold medal dreams would be impossible without the right equipment or tools. To attain financial gold, you’ll also need the right products, suited for your needs. If your goal is to save, a high-interest savings account, or a term deposit, will be helpful. If you need to do a better job managing your money, a budgeting tool (available from most financial institution web sites) is a must-have. No matter your goal, your financial institution can recommend the tools you need to achieve them, whether it’s a personal loan or a mortgage, RRSP, RESP, life insurance, or investment products like stocks or mutual funds. Financial products have varying features so it’s important to work with your financial institution or advisor to ensure your selection meets your needs.
3. Work with a coach
We can’t imagine an Olympic athlete without a coach. The responsibility for winning falls to the athlete, but the coach plays a critical role, pointing out areas to work on and strategies for success. A certified financial planner can help you do the same with your money goals. Whether your immediate goal is to manage, save, grow or protect your money, or even if you’re not sure what your focus should be, a financial planner can assist. You don’t need to pay for the services of a financial planner at most financial institutions, so why not tap their free expertise!
4. Apply discipline and don’t quit
Olympic champions like Michael Phelps make winning look so easy, but we know it takes a lot of discipline and determination to get to the podium. We need the same attitude and effort to achieve our financial goals. Kicking your daily latte or lunch-out habit and directing the money towards your savings account may feel like a sacrifice at first, but it pays in the end. It may take all your will power to stick to that budget, but don’t give up. Keep persevering with those financial goals and you’ll also come out a winner!
Kathy McGarrigle is chief operating officer for Coast Capital Savings.