Money matters are too important to ignore. Financial illiteracy is linked to money mismanagement and to debt. Debt, in turn, is associated with lower self-esteem, lower productivity, stress, depression and divorce.
Check your beliefs about money. How do you know if you’re avoiding reality when it comes to finances? Here are some of the clues:
- Do you try to put money and finances out of mind?
- Do you avoid talking about money with family and friends?
- Do you approach your mailbox with dread and avoid opening bank statements or credit card bills?
- Do you know what your credit score is?
- Do you know your true net worth (assets minus your debts)?
If you can relate to any of these feelings and behaviors, it may be time to take a hard look at your relationship with money.
Keep tabs. Tracking your income and your spending is critical to healthy finances. If you’re not tracking the money coming in and the money going out, you don’t know if you’re spending your resources on the things that really matter to you.
Develop a spending plan. For some people the word “budget” like the word “diet,” calls to mind feeling deprived. Instead of figuring out where to cut back, think about what you want to spend. If going to concerts or sporting events is really important to you, you might decide to spend more money on those outings and less on dining out or cable television. By making such decisions more intentional, you’ll get the most bang for your buck.
Make it easy on yourself. Use automated systems as much as possible. Arrange to have a portion of your paycheck automatically deposited into your savings account and your retirement account. Set up automatic reminders to alert you when a bill is due. It’s a lot harder to make a bad decision when the decision is out of your hands.
Use tools. Technology makes it easier than ever to stay on track financially. A variety of software programs and apps can help you track spending and set spending and saving targets.
For more information about financial well-being, the following resources may be helpful.
- MoneySense Magazine (Canadian resource). www.moneysense.ca
- Invest in your financial well-being. Government of Canada. https://www.canada.ca/en/financial-consumer-agency/news/canadas-financial-literacy-blog/invest-financial-well-being.html
- Canada’s Financial Literacy Blog. Government of Canada. https://www.canada.ca/en/financial-consumer-agency/news/canadas-financial-literacy-blog.html
- Canadian Financial Calendars. My Money Coach (From Credit Counselling Society). https://www.mymoneycoach.ca/resources/financial-calculators
- Credit Counselling Society. https://www.nomoredebts.org/
- Mortgage Affordability Calculator. Canada Mortgage and Housing Corporation (CMHC). https://www.cmhc-schl.gc.ca/en/finance-and-investing/mortgage-loan-insurance/homebuying-calculators/affordability-calculator