1) Do you track monthly income and expenses?
[x] Yes
[x] No or Partially

When you track your income and expenses it can help you eliminate unnecessary expenses leaving you with more to be allocated to wealth creation or lifestyle spending. Not following a budget can make it difficult to follow through with any plans that require an ongoing financial commitment.

Planning Tip:
If you do not track your income and expenses, this Budget Planner can help you create a customized budget in 3 simple steps.

2) Which statement best describes your cash flow situation at the end of the month?
[x] There is excess money each month
[x] There is just enough to pay bills if nothing goes wrong
[x] There is a need to juggle bills to make ends meet

Having excess money each month is the ideal situation to be in, but if you find that you have just enough if nothing goes wrong or that you must juggle bills to make ends meet, you need a cash flow plan. Creating one can help you eliminate unnecessary expenses so that you have excess each month that can be used to build an emergency fund or save for other goals.

Planning Tip:
If you struggle each month to make ends meet, this All-In-One Budgeting Template will help you become more aware of how you spend your money.

3) Do you maintain a statement of assets and liabilities?
[x] Yes
[x] No or Partially

Maintaining a statement of assets and liabilities, will help you remain in control of your finances and allow you to track your progress as you build wealth. Also called a net worth statement, not having one will make it more difficult to track your progress as you set goals and grow your wealth.

Planning Tip:
If you do not have a statement of assets and liabilities, use this Net Worth Calculator to calculate your personal or household net worth and compare your results to other Canadians.

4) How many credit cards do you own?
[x] 1 or 2
[x] 3 or 4
[x] 5 or More

Having multiple credit cards is not necessarily a bad thing, you can simply cancel credit cards you don’t need, or put them away and not use them. But if you carry a balance on some or all your credit cards, you should create a plan to pay off and cancel unneeded cards before making other investments. Paying off your high interest credit cards will save you thousands and free-up cashflow for the other goals you have.

Planning Tip:
Use this Credit Card Comparison Tool to compare features for different credit cards, including interest rates, annual fees, and rewards to find the credit card(s) that best suits your needs.

5) Which statement best describes your use of credit cards?
[x] They are a convenience and I pay them off each month
[x] They are a source of short-term financing
[x] They are a source of cash and I constantly carry a balance on them

Credit cards should be used as a convenience only. Financing purchases, even for a few months, will significantly increase the cost of borrowing when compared to using a line of credit. If using a line of credit is not an option, avoid taking cash advances as this will usually increase your cost of borrowing over a direct charge from the merchant to the same credit card.

Planning Tip:
If you carry a balance on credit cards, this Debt Repayment Calculator will tell you how long it will take you to be debt-free using five different repayment strategies.

6) Which statement best describes how you finance major purchases?
[x] I plan and save in advance
[x] I use a line of credit that I have with our bank
[x] I use consumer financing provided by the retailer

If you are unable to save the money in advance, using a line of credit is the next best thing. Consumer financing that is provided by the retailer is generally at a much higher interest rate than other conventional loans, and some include interest penalties if the loan is not paid off before the end of the term. If you decide to use consumer financing, be sure to read the fine print before signing the agreement.

Planning Tip:
If you use consumer financing, this Loan Calculator can help you make a plan to avoid costly mistakes when paying it back.

7) Do you budget for known expenses such as a vacation and Christmas?
[x] Yes
[x] No or Partially

By not budgeting for known expenses, you run the risk of being over-extended, and may not be able to maintain the plans you have established for your goals. To finance known expenses turn them into a short-term savings goal and regularly set aside a small amount of money in a high-interest, no-fee savings account.

Planning Tip:
No matter how big your goals are, this Financial Goal Calculator can help you setup a savings plan that fits your budget.

8) Do you have an emergency fund?
[x] Yes
[x] No or Partially

If you do not have an emergency fund, or at a minimum have access to a low-interest line of credit, you run the risk of being in a situation where you have no choice but to cancel all or part of the financial plans you have implemented. There is no magic to creating an emergency fund, it requires setting aside money each month until you have 3 to 6 months of expenses.

Planning Tip:
If you do not have an emergency fund, use this Emergency Fund Calculator to estimate how much you may need for financial emergencies.

9) Do you have a mortgage?
[x] Yes
[x] No
[x] N/A (Renter)

If your mortgage interest rate is well below current rates, a possible increase in payments at the next renewal should be factored into your cash flow plan now to avoid putting you into a situation where you may have to abandon one or more of your goals. One way to mitigate the risk of higher interest rates in the future is to increase your mortgage payment each year as your income increases. This way should rates be higher, you can roll-back your payments based on the original amortization schedule.

Planning Tip:
If you pay your mortgage monthly, use this Mortgage Calculator to compare different payment strategies to pay your mortgage off earlier and save thousands in interest.

10) Do you have a line of credit?
[x] Yes
[x] No

A line of credit can be used for emergencies and/or major purchases, freeing up cash flow for funding other goals. Having one will provide you with added flexibility and control over your finances and is a good alternative to a traditional emergency fund. If you have an outstanding balance, consider allocating any short-term saving goals, such as establishing an emergency fund, to paying down the line of credit. The savings in interest charges will generally be greater than the after-tax interest you could otherwise earn.

Planning Tip:
If you have a balance on your line of credit, use this Loan Calculator to create a repayment plan.

11) Other than listed above; do you currently have other debt obligations?
[x] Yes
[x] No

Managing your debt obligations is essential to ensuring your financial objectives can be achieved and any plans you put into place will be followed-through. Review your other debt obligations to determine if a consolidation loan will save you interest.

Planning Tip:
If you have multiple debts or owe money to the Canada Revenue Agency (CRA), use this Debt Consolidation Calculator to calculate how much your monthly payments could reduce.