Level Up Your Finances: Level One

You know how your money is going to help you do more of what’s important to you.

Why it Matters

Managing your money can be boring, challenging, and confusing. It will be much harder to create and stick to your plan if you don’t have a clear reason why you are going through the effort in the first place. To make money easier to manage over the long term, we need to think of it as a tool to support what matters most to you and give your money a specific purpose. Vague, boring goals that lack meaning are much harder to keep. We need specific, mission-driven ambitions.

For example, would you rather:

• Get out of student loan debt because debt is bad OR Pay off your student loan debt so you can start saving for your dream vacation across Europe?

• Save your money so you can retire someday OR Max out your RRSP and TFSA contributions so you can spend the Canadian winters somewhere way warmer?

• Start investing OR Put your portfolio on autopilot so you can save for my retirement while also buying a horse?

Goals for this Level

In Level 1, we want to make specific, mission-driven ambitions.

To do that, we need to know two things:

1. What is most important to you

2. How your money can get you more of what’s important to you

1 - What’s important to you?

This is a Big Question. To make it easier to digest, think about:

1. What are your happiest memories?

2. What accomplishment are you most proud of?

3. When do you feel most like yourself?

Then think about what themes you notice. For example, are your happiest memories the ones of summers at the cottage with your family? Do you feel most like yourself when you are paddle boarding around the lake? Perhaps being outside and enjoying time with family is super important to you.

Are you most proud of that dinner party you hosted last spring? Are you happiest checking out new restaurants with friends? Maybe culinary adventures and close relationships are your Big Things.

2 – How can your money help you get more of what’s important to you?

Going back to the example above, do you want to have your own vacation property? Perhaps a timeshare, or would you rather own it outright?

Do you want to have your culinary adventures in the kitchen of your dreams? Make it to a Michelin-starred restaurant on every continent?

Think about what role your finances will play in helping you achieve what’s important to you. What does your money need to do to help you achieve your ambitions – like that second property or dream cooking vacation?

Frame how many can help you as a SMART goal*:

• Specific: What are the details about the goal? Instead of ‘save more’ think ‘save 13% of my income, increasing to 15% in the next year’

• Measurable: How will you know how you are doing? Instead of ‘start investing’ think ‘Invest at least $100 in the market’

• Attainable: Is the goal realistic? Instead of saving 20% of your income when you’re currently at 2%, aim for a middle ground with stretch goals. Perhaps aim to be at 5% in 6 months and increase to 10% in 12 months.

• Relevant: How will it help you achieve what’s important to you?

Time based: When will you complete it? When will you meet specific milestones? Instead of ‘save 13% of my income, increasing to 15%’ think ‘save 13% of my income, increasing to 15% in the next year’.

You’ve crushed Level 1 when you can fill in the blanks.

I want to [insert SMART money goal] so that I can [insert why it’s important to you].

*Untangle Take: At Untangle Money we love SMART goals. They are really great for many people. If this strategy works for you, go for it! Some people find SMART goals difficult to define. If you are one of these individuals, have no fear.

At Untangle Money we believe that everyone should understand how much money they need to maintain their current lifestyle into retirement, and what getting to that retirement amount looks like month-to-month. You can start with this knowledge before having other SMART goals for your money.

What's next?

Stay tuned every Thursday for a new level in the series!

Pineapple Finance Co is a collaboration between Emily and Elizabeth with a goal to answer one simple question: could they use Instagram to improve Canadian's financial literacy.

You can follow Pineapple Finance Co. over on Instagram, and we've linked two other blog posts written by Emily and Elizabeth here:

1. What We Learned From Our First 1,000 Followers

2. What We Learned From Our First 1,000 Followers: Part 2

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Financial independence is a huge part of being a strong, independent person, and it is our mission to help women, and anyone who doesn't feel safe or welcome in financial spaces typically dominated by cis men, set themselves up for financial success.

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