Financial stress is a reality for many Canadians. Amid hectic schedules and competing priorities, it can be difficult to find the time to pay finances the attention they require. However, using these strategies can help get control of household money matters:
– start simple and make a list. Many people avoid organizing their finances because tackling everything at once is overwhelming. Breaking down tasks in a list helps identify specific goals which can be addressed one at a time. Consider prioritizing and assigning deadlines for each task on the list;
– set short-term and long-term goals. It’s important to assess current circumstances to help organize efforts to achieve future plans including travel, children’s post-secondary education and retirement. Create a timeline (six months, one year, five years, etc.) and identify ideal financial progress at these milestones;
– have an advisor review finances to take a holistic look at the financial situation and help with building a plan;
– pare down to a single credit card to reduce account fees and multiple statements. Where possible, consolidate expenses and streamline payments. Some companies offer discounts if you bundle services like telephone, internet and cable. Sign up for electronic billing and consider setting aside one day weekly to do online banking and bill payments. Automate the savings plan to “pay yourself first”.
– zero in on spending habits. The convenience of credit cards, debit cards and online shopping makes it easy to lose track of spending. Track purchases and be conscious of every transaction. If overspending, use only cash or a debit card for a month and stick to a predetermined amount each week; and
– create a budget. Budgets can range from complex spreadsheets to hand written documents. Regardless of the format, a budget can be an effective method of tracking, organizing and understanding your expenses. A clear picture of “money in” and money out” as well as a disciplined savings and debt reduction plan can help trim costs and achieve goals.
Each person’s expenses are unique to them. The key is to organize spending to help make finances work.
Submitted by Dan Allen, CFP, MFA, EPC a financial advisor specializing in retirement income planning and protection.
