For many of us, the New Year means a fresh start. So even if you fell into a financial slump during the year, or went off the deep end over the holidays, now’s the time to reboot, bounce back and make smart plans for the future.

Here are three short-term goals that could be just within your reach, as well as three longer-term goals to help you prepare for the future:

3 short-term financial goals

1. Start saving more

Is your New Year’s resolution to save more and spend less? You can start by using a budget calculator to find out where your money goes. See what’s making you fall short, break even or come out ahead. With a clear understanding of your monthly spending habits, you can figure out where you can cut back. You may find that you’ve been spending more than usual on dining out. Or you might see that your electricity bill is creeping up, and you could look into ways to rein it in. Saving isn’t always easy, but it’s worth the effort in the long run – especially if it leaves you with a bit of extra cash at the end of the month.

Once you’ve formed the habit of saving regularly, you might be wondering how best to handle the money you’ve set aside every month. Depending on your financial priorities, you may consider aiming for one of these financial goals.

2. Use a TFSA to save for a milestone

Got a milestone coming up this year, like a wedding, a new baby, a dream vacation or a new home? Growing your money in a tax-free savings account (TFSA) is ideal for short-term goals like these. How does it work? Here’s the gist: You put after-tax money in your TFSA, and any investments you hold inside your account – GICs, mutual funds, segregated funds, stocks, bonds, etc. – grow tax-free.

Plus, you’re free to take your money out at any time, for any reason. So, you could use your TFSA money to meet any of your financial goals, whether it’s planning for a big expense, putting money aside to help finance a parental leave, paying off credit card debt, paying down your mortgage or building up an additional source of retirement income.

But keep an eye out for the yearly contribution limit, which has risen to $6,000 for 2019. However, if you’ve never opened a TFSA and you were at least 18 in 2009, you can contribute up to $63,500 today. And, you can re-contribute any withdrawals in the following year.

3. Build an emergency fund

No matter how hard you try to save, life has a way of throwing unexpected financial demands your way. Anyone who’s ever had a roof leak after an ice storm, a car break down in the middle of nowhere or a furnace call it quits during a cold snap can attest to that. While you can’t usually predict a financial emergency, you can prepare for one.

An ideal contingency plan lets you to save and grow your money during good times and have easy access to it when hard times come along. For such cases, you may consider putting some of your spare cash in a high-interest savings account. You can’t hold investments in them, but they do pay slightly more interest than an ordinary savings account. Since your money isn’t constrained by the rules for investments such as GICs and mutual funds that you might hold in a TFSA or an RRSP, it’s much easier to get at when you need it.

3 long-term financial goals

1. Saving for retirement

Making the most of your registered retirement savings plan  (RRSP) is one of the best ways to secure your financial future. Any investments you have growing in an RRSP are tax-free until you take them out, which is presumably when you’re retired and in a lower tax bracket than you were when you put the money in during your working years. Along with growing your retirement income for the future, your RRSP contributions also help you now, by giving you deductions that can reduce the income tax you’d otherwise pay.  

Missed the March 1 deadline to contribute? No problem. You can always carry forward unused contribution room in an RRSP and your contributions will be tax-deductible next year.

Just remember that RRSPs are better for long-term savings, not short-term savings. Why? Because early withdrawals from your RRSP can increase your annual income and are subject to a number of tax penalties.

2. Getting the right life insurance

Having an emergency fund can help see you and your family through short-term crises. But what about the long-term challenges your family could face if you were to die? This is where life insurance plays a starring role.

No matter your age or current financial situation, you likely have people who rely on you financially. Perhaps you have a mortgage with your partner to pay off, debts and loans that others have co-signed for or kids to raise. These financial obligations don’t die with you. Instead, they’re passed along to someone else. With the right life insurance policy, your family or other beneficiaries can use the money from the death benefit (the amount of money paid or due to be paid when an insured person dies) to cover any expenses or debts that they had relied on you to pay for.

Life insurance was designed to help your family cope with the financial impact of your death. And while you’re still alive and healthy, it can bring you peace of mind, knowing that the people you love will be financially protected when you’re no longer around.

3. Take steps to plan your estate

If you have life insurance, you’re already doing a lot to protect the people you cherish. But you also want to make sure the money you’ve worked so hard for goes to the right people after your death – with as little stress as possible.

Begin by listing all your assets (bank accounts, investments, registered savings plans, real estate, etc.), then think about whom you’d like to inherit your property and whom you would ask to be your executor (the person who carries out the terms of your will after your death). Then you’ll be ready to see a lawyer about writing your will. If you die intestate – without a will – the law decides how your assets will be divided. This means your money and valuables might end up in the wrong hands. There are also ways to reduce the income tax your family or beneficiaries might have to pay. Without a plan in place, your heirs could inherit a huge tax burden.

Estate planning is a long-term goal, not a one-time task. Once you’ve written your will, you need to update it regularly. Why? Because change is a natural part of life and significant events like illness, divorce, marital separation or having children can affect your estate. Maybe you’ve had a falling-out with someone and don’t want to include them in your will, or you now have grandchildren you want to add as beneficiaries, or your adult children tell you they don’t want to be executors of your estate. Whenever your circumstances change, think of it as an automatic trigger to spruce up your will.

Review your finances with an advisor

Feeling a little overwhelmed? Sorting through your finances can be intimidating if you’re new at it. But you don’t have to do it alone. An advisor can walk you through all your options, check off everything you need to address and help you build a plan that suits all your goals.