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5 signs you’re on track to achieve financial success

5 signs you’re on track to achieve financial success

“You do not determine your success by comparing yourself to others. You determine your success by comparing your accomplishments to your capabilities.” – Zig Ziglar

One thing I’ve noticed during conversations with people about finances is that it’s often the people who are doing everything right financially who are most anxious about their financial future and have the most doubts about whether they are managing their money in the most effective way to achieve financial success.

A good example of this is a young woman in her early 30’s I met with recently, who had questions about the Home Buyers Plan. “Julia” and her fiancé are planning on buying their first home within the next two years and she wanted to find out more about how the HBP works and whether it made sense for her to use it. Usually, when I have these conversations with people, it’s because they’re working hard to gather the money that they need for a down payment and they need to use their RRSP savings to get them to their goal. However, as Julia and I talked, it transpired that, over the past 10 years, she has managed to save almost $100,000 towards the down payment. Considering that she has never earned more than $60,000 a year, that’s quite an accomplishment.

However, because her fiancé has close to $200,000 in savings, she was worried that she hadn’t saved enough. Given that the condos they’re looking at are in the $350,000 price range and they were planning on financing part of the purchase with a mortgage, I was able to assure her that what she had saved was significantly more than most people her age had in savings and that, by the time they were ready to start looking seriously for a home, her savings would be more than enough to meet her home buying goals.

Julia’s story is a good example of how we often gauge our own performance based on how we think we compare to those around us. If you’re a natural saver surrounded by other natural savers, you might not realize how strong a position you’re in financially. If you’re a saver surrounded by spenders, you might assume you don’t have as much as those around you. In finances (as well as other areas of life) we make assumptions about how we’re doing in comparison to other people based on their behavior, the information they share with us and our own perceptions. However, I’m willing to bet that, more often than not, those assumptions are wrong. So, for those of you who have been wondering how you’re doing with your money; here are five clues that you might have a better grip on your finances than you thought:

1. You understand your cash flow

If you know how much money you have coming in each month and how much you have going out then you’re several steps ahead of most people. Good money management isn’t rocket science, it’s rocket science. It’s built on the basics and the foundation is knowing how much you have to come in and how much you have going out each month. If you can manage your cash flow and live within your means, then you’re on the right track to building wealth and creating financial security for yourself and your family.

2. You save

While it would be nice if there was a magical shortcut to getting rich, the reality is that our best chance of building wealth is to save it ourselves. While it’s definitely possible that a lottery win or other unexpected windfall could put us on the fast track to financial freedom, statistically speaking, we have a better chance of winning an Oscar or becoming an astronaut so it makes sense to have a backup plan. Saving is a much better bet when it comes to creating financial security and yet, according to Stats Canada, most of us are saving less than 5% of what we earn.

If you’re saving more than 10% of your gross salary each year towards retirement then you’re keeping pace with the savings benchmark suggested by many financial experts. If you have 3-6 months of expenses in a savings account then you’re well ahead of average and much better protected against the unexpected than the 48% of Canadians who couldn’t pay their bills if they missed one paycheque. (Broadbent Institute 2016). I’m not a huge fan of hard and fast rules when it comes to money because what works for one person doesn’t necessarily work for everyone. However, if you have an automated savings plan, live within your means and consistently save 15-20% of your income then I’m willing to go out on a limb and say that you’re doing well.

Related Article: 6 Principles for Saving Money

3. You’re a conscious spender

As with many things in life, there are two sides to the money management coin: saving and spending. It’s not enough to understand your cash flow; you also have to put that knowledge to work for you by managing your spending rate as well as your saving rate. While saving is a cornerstone of building financial security, conscious spending is a key factor of good money management. If you’re managing your money well, that means keeping your expenses at an affordable level (less than 80% of your income), making conscious choices about what you spend your money on and keeping impulse purchases to a minimum.

4. You keep debt to a minimum

Debt is the biggest obstacle standing between you and financial freedom. A recent Stats Canada report estimated that 14% of the average Canadian’s after-tax earnings are used to pay the non-mortgage debt. Over the past few years, we’ve seen a huge shift in the way debt is marketed to consumers. With an emphasis on payments rather than total cost; an increase in pre-approved credit cards and lines of credit being offered to consumers by their financial institutions and incentives such as 18 months interest-free financing available in many retail stores, it’s hardly surprising that debt levels in Canada continue to increase at a rapid rate.

When you consider the fact that interest rates are likely to start rising within the next couple of years, and that, for most Canadians, a 1% rise in interest rates would cause significant financial stress, it makes sense to do what we can to get rid of as much debt as possible while rates are low.

If you pay off your credit cards in full each month and don’t have a balance on your line of credit then you’re way ahead of the curve when it comes to creating financial security. If you’re carrying debt but have a clear plan to be debt-free within the next 3 years then you’re also ahead of the curve. If you’re carrying no consumer debt and are either mortgage-free or on track to be mortgage-free several years before you retire, then you’re doing a lot of things right to create a solid financial future for yourself.

Related Article: Make a Debt Plan

5. You have goals and plans

Napoleon Hill once said that “a goal is a dream with a deadline”. A deadline is a key difference between having a goal and having a general intention to get something done. People who are in control of their money tend to not only have a pretty good idea of where they want to go, they also have a plan to get themselves there.

Goals can be simple or they can be complex. Some people have a goal to save a certain amount of money before retirement while others might have a certain percentage of their income that they want to consistently put away. Some people have a plan to aggressively pay down their mortgage while others want to maximize their RRSPs or TFSAs. Some are saving for vacations or home renovations or have a goal to give money to children or parents or causes that mean something to them. Most people have several goals: short-term and long-term; personal and professional; indulgent and altruistic, practical and outrageous and each goal has its own plan and its own timeline.

Goals and plans create a framework that helps guide the way we manage our money and helps motivate us to save. Having goals and plans to achieve them helps us determine how much to save, how much to spend and helps us direct our financial energy towards building a secure and rewarding future.

If you have financial goals and plans in place, and you’re in the process of working those plans, then you’re making real progress towards creating solid financial success.

One last thought…

There are no hard and fast rules for financial success but there are some key principles and habits which can help you get there and that’s what I’ve tried to touch on in this post. At the end of the day, each person’s financial path is as individual as they are. What motivates one person won’t inspire another and what works for one person won’t necessarily work for another.

No matter where you are in your financial journey, there are always ways to do a little more but the choice to act or not act is always ours to make. If you’re doing all the things I mentioned in this article then that doesn’t mean you couldn’t do more. If you’re doing none of them, that doesn’t mean you can’t choose to set a goal, make a plan and make a start.

None of us has the ability to go back in time and undo or re-do the past. None of us can predict the future. However, each of us has the ability to create something better for ourselves than we have right now and to make the world a little better for others in the process.


  1. Peter

    Great article, Sarah.
    I have a different problem and hope that you, or Jim, would address it in a future publication. I’m a compulsive saver and envy my friends and acquaintances for the splendour that surrounds them.
    Between my wife and I we have a (rented out) condo in White Rock, BC, and our home in Oakville. We have no mortgage, no debt, $40k at EQ Bank, earning 2.3% and investments totalling about $1.1m.
    We have been retired for 10 years, travelled extensively for the past 15 and spend winters in the sun. We reinvest our RIF income because we get by on our CPP and OAS, along with a small $600 private pension.
    Most of our friends of similar age are still paying their mortgages and have credit card debts approaching their annual income.
    Yet, I wonder, who has the better deal. We travel more than they do but they travel “in style”, while we’ll spend months in Barbados without A/C.
    They live in smallish mansions while we are in a link home. Comfy, utile, but non-descript. I’m always looking for bargains and have taken to reading flyers and cut my grocery expenses by over a third. Our friends dine at Ruth Kris and we splurge at Swiss Chalet. Our friends borrow money from us because we do so at rates that resemble one third of Credit cards and 3 times what EQ pays.

    In short, they envy us, yet I envy them. While we are indeed happy and content, the question arises; who’s happier? I wonder.

    Neither, my wife, nor I have ever earned in excess of $82k


    • Claude Mayrand


      One little sentence in Sarah’s article should ease your mind – it does mine.

      “At the end of the day, each person’s financial path is as individual as they are. What motivates one person won’t inspire another and what works for one person won’t necessarily work for another.”

      Regardless of the envy you mention, you seem to be happy. Put a mirror between you and the neighbours you’re looking at.

      I would do some things differently than you, but there’s that mirror… ☺

    • Gordon Warlow

      “Most of our friends of similar age are still paying their mortgages and have credit card debts approaching their annual income.”
      If you are not happy with over 1 million dollars in investments that you do not need to access because your CPP, OAS and a $600 pension cover your present expenses, you spend your winters in Barbados (without AC?). You just might be happy, but are so preoccupied with other peoples spending habits to realise it.
      Maybe (maybe) you both could afford to splurge a bit (maybe some AC in Barbados for starters) because your money will still be in savings/investments long after you both exist on this earth…
      At any rate, stop thinking and start living. After all, if obsessing over saving money doesn’t make you happy, then why not spend some of it?
      Cheers, and enjoy your retirement years.

  2. Steve Bridge

    Hi Sarah,

    Great article – well-written and thoughtful. ! I love that you mentioned cash flow first. It’s the most boring but perhaps the most critical piece for everyone.

    I am now following you on Twitter and look forward to hearing more of what you have to say.

    Steve Bridge
    Money Coach

    PS Peter, why would you envy those other people? Just spend more if you want to spend more- you have the means. Great proof that money doesn’t buy happiness…

  3. Guy


    You and your wife got where you are because of your habits. Good for you! My personal goal is to end up where you are financially. I’m saving a large part of my income and don’t splurge on expensive toys. I do, however, try to keep things somewhat in balance. My wife and I have a budget, and one part of that is for vacations. We go somewhere warm and interesting once a year. If it was not part of our budget, I would never go anywhere because “it’s too much money”. My suggestion is to tweak your budget and add in a few frivolous things. Stay on budget so you don’t have to worry about running out of money, then SPEND the part you have allocated to frivolous things. I’m not sure if this will make you happier, but it will be an interesting experiment.

    • Peter

      Thank you, Guy. Sounds doable enough with no risk or surprises if it is planned ahead of time….
      Thank you


  4. Claude Mayrand


    You hit it “outta de park” again.

    This is a must read for retirees and for those building a retirement fund.

    Note that everyone is putting part of their income away in CPP. If you’re allocating 5% of your disposable income, it’s actually 5% plus CPP premiums.

    I would add that those building their Personal Pension Plan should seriously consider investing outside a registered account. Low income earners can actually reduce their income tax bite when receiving dividend income.

    • Cjayce

      You can’t possibly be saying CPP is a good deal…
      In order to get the measly $13,000 a year max you have to contribute the max for 37 of 40 years. Most people don’t qualify.

      Now take that $2500/year that comes off your personal pay AND the $2500/year your employer kicks in (if self employed you kick in both).. put it in a compound interest calculator for 37 years at a modest 5%. See what the interest only return would be! And that’s leaving you a solid Principle amount that you could draw down or will to family…

      Clearly CPP funds left in the hands of a FIRE oriented individual would be FAR more beneficial…

      That said, I recognize that a safety net is needed and that’s sorta what CPP is… But calling it anything other than a Tax to support a minimum safety net is a stretch.

      • Claude Mayrand

        CPP, OAS and GIS are safety nets or emergency funds or kinda like an insurance policy that dies when you do.

        Nobody can retire on those amounts in Canada. If you combine those revenues with withdrawals from an RRSP or RRIF payments, the income tax bite is extremely painful.

        That’s why everybody needs a self-managed Personal Pension Plan, preferably outside a registered account.

        And 5% is a miserable return in this day and age. Use the free TMXMONEY dividend screener to see what’s available to anyone who likes money regardless of income. I reject anything under 8%. Then investigate a Margin account at a discount stock broker to leverage your return.

        • Peter

          Hello Claude
          I’d love to find any low risk investment that returns 8%. Considering that you turn down opportunities below that, please share a few of those gems with a less savvy investors, such as myself.

          • Claude Mayrand


            Am I detecting sarcasm?

            Here’s what I wrote: Use the free TMXMONEY dividend screener to see what’s available to anyone who likes money regardless of income.

            Risk is like hot peppers, different for everyone.

            My capital has been paying me over 12% in tax advantaged non-registered gross income for about 12 years.

            In my TFSA I re-invest my dividends. My TFSA capital is $47,500 and is paying me $510 a month this year.

            I repeat: Use the free TMXMONEY dividend screener to see what’s available to anyone who likes money regardless of income.

            My definition of “risk” is the same as yours: running out of capital. My capital slowly grows and my income slowly grows.

            I’ve never had the earning power you seem to have had. My retirement capital was nowhere near what yours is and I have not had any debt since my early twenties. Yet, today, I too go on trips, give money away, volunteer weekly, have hobbies, a job – I manage my portfolio very successfully having learned from mistakes and successes.

          • Peter

            No sarcasm at all, Claude. I tried to look for a dividend screener at tmxmoney; cannot find a link for it. Can you help?

          • Claude Mayrand


            click add criteria

            select dividends|rate

      • Peter

        Actually, Cjayce, it’s not quite as clear-cut as you suggest. Let me state some facts:
        In 1977, (40 years ago), the maximum contribution was calculated as follows:
        Maximum insurable earnings of $9,300 less the then yearly basic expemption of $900 times 1.8%, or (9300-900)*1.8%, totalling $151.20. Even if you would add a “modest” 5% return you’d still only have $158.76. Adding subsequent years, (40 of them) at the then determined contribution in effect, would bring you to todays annual contribution of $55,300 less $3,500 basic exemption times 4.95%. That amount is $2,564.10.
        The total that was contributed from an individual who always contributed at the maximum rate INCLUDING a (not so modest) return of 5% per annum is a, (not so whooping), $52,149.51

        I grant you that by adding the employer’s portion this would then be double to $104,300.

        Going forward from today on, even if the CPP of the “measly” $13,000 never got another increase, you’d have 8 years of pensions and then you’d be on your own.

        Perhaps the CPP is not such a bad deal after all. Whaddayathink?


        • Cjayce

          Peter, I intentionally left out the inflation factor to keep it in today’s funds.

          Comparing 1977 $’s to today’s $’s on an inflation adjusted amount should balance out. I also used a very low 5% rate of return so leaving tons of room for inflation to factor in on earnings on those contributions.

          You are absolutely correct that CPP has an insidiously creeping side. It goes up yearly with inflation… What is actually a $2544 individual and $2544 employer contribution this year ONLY will get you $13370.04 per year. This assumes you paid in the max 37 of the 40 previous years. Most don’t hit that max for that long. This explains why the AVERAGE CPP payout is only $643.92 a month!

          Horrible return on your contributions from an investment perspective. Remember CPP tries to market itself to the gullible as a viable pension plan.

          Claude points out that CPP, OAS and GIS are safety nets. I agree. However only CPP attempts to market itself as a pension. OAS and GIS are funded out of general tax revenue.

          If CPP were truly a pension then the return should better reflect the contribution amounts. Haven’t even touched on the ugly meager death benefit payout…

          The simple point is that anyone defending the CPP as a reasonable alternative or even an item to substantially depend on in retirement needs to rethink. Run some numbers and refocus their efforts on saveing independently.

          Any time the government kindly starts talking about tinkering with CPP to increase contributions we all need to run numbers and point out the extreme shortcomings for the individual.

          In the event a province starts talking crazy talk like starting a pension in addition to the CPP we all need to take note. (ORPP for example)

          Perhaps a better model is the AUS pension model vs CPP.

          FIRE minded folks would be far better served leaving the funds in our hands to invest. Even modestly savings minded folks would be far better off.

  5. Ana

    great article… I am 68, following near all of those tips, and approaching retirement (in 4 years) with a lot of confidence, even when I am on my own… Thank you for your common sense and smart words, Sarah!

  6. Joelle Willis

    Hi Sarah,
    I have the same high-quality problem that Peter has, and it boiled down to my fear of running out of money before I die. It took a sit-down with my financial adviser to calculate how much money I could afford to spend in a year without running out at age 100, and seeing how that compared to my spending. When I saw that I had more than I needed to cover the basics, I loosened up the purse strings a bit more. I’m still a bargain shopper, but I’ve learned to live it up just a little along the way.

  7. Peter

    Thanks for the link, Claude. I must be too thick to use it. Can’t figure out how to find parameters to screen for stocks paying over 8% in dividends p.a.
    Very useful site, but way more info than I understand. Yet, above parameters would give me enough to work with

    • Claude Mayrand


      ☺ Sorry you’re thick ☺

      Keep trying. It’s new to you. You once said “ga-ga” for everything. When the tool finally reveals the info, pad your forehead!

      You’ve come this far… Just another unlocked gate to open.

      • eliminate all criteria except “Exchange”
      • select Current Dividend Yield rather than rate (I’m no longer perfect)
      • change Condition to >= then 5
      • you’ll get ±355 results
      • click “Edit Columns”
      • click “View more columns”
      • deselect most useless fields for our purposes
      • select “Dividend” and “Yield” and “Yield 5 year average”
      • click Save
      • click the Yield column to sort by Yield (up or down)
      • if you copy the >7% results and paste them to a spreadsheet, you’ll have a list of ±150 TSX stock/funds that pay over 7%
      • these are the headings/columns I used:
      Symbol Company Name Price Dividend Volume Yield Yield (5 Y…

      Now it’s up to you.

      PS: Sadly, I didn’t make the list (updated) just for you; I was going to send this to a relative for them to explore these for themselves.

  8. Cjayce

    Great Article. Helps me and hopefully others keep the faith! Anything to remain motivated. Wish I’d started this in my 20’s.

    1. You understand your cashflow.
    Done. Networth and budgets updated monthly
    2. You save.
    Done but pressing for better. Counting Mortgage accelerated payments I’m 57% of after tax income saved. 37% not counting Mortgage.
    Question, do people here consider the the principle payment on your Mortgage part of savings? What about principle payment over and above the minimum principle (accelerated monthly payments)?
    3. You’re a conscious spender
    Done. Yes but recently allowing slightly more spending
    4. You keep debt to a minimum
    Done. No debt outside my Mortgage.
    5. You have goals and plans
    Several near term and long term… near term – fully fund all avail RRSP contribution room and TFSA room. Mid term, non-registered investments. Long term, intend to be able to retire fully on or before 55 yet still maintain current spending + additional for travel.

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