For many Canadians, financial planning remains a stressful and elusive task. It’s not just about creating a budget and sticking to it; it’s also a matter of seeing into the future, in a way, to ensure you and your family are on the right track. That can be difficult to do when there’s never enough money to add to a savings account or when unexpected expenses drain what you have.
Fortunately, there are several simple things you can do to give your finances an overhaul. It’s important to keep up with spending for the entire family, not just for the sake of your checkbook, but for your own mental health. Money is a top cause of stress for Canadians and it doesn’t seem to matter how good or bad the economy is, because there are always bills to pay. That stress can leave you feeling depressed, anxious, or unable to function at the level you need to, and it can even lead to substance abuse in some cases. For more info about the link between mental health and addiction, read on here.
Keep reading for some tips on how to get control over your finances this year.
Look at your spending
The first step in taking control over your finances is to look at your spending carefully. Sit down with your spouse or partner and go over your bank statements for the past two months. Look at where your money goes, and don’t forget to factor in cash transactions. Outside of utility bills, rent or mortgage, and necessities like gasoline and groceries, what did you spend the most on? Remember that sometimes seasonal factors are at play too, such as having to buy school clothes for the kids.
If you see a chance to cut back on your monthly spending, talk it over with your family members. Many families choose to get rid of cable in favor of a less expensive streaming service, or to get rid of a landline phone since they already have cell phones. You don’t have to be brutal with your cuts; if it’s something you enjoy, think twice before getting rid of it or simply cut back. For instance, if you subscribe to a streaming video service and receive DVDs in the mail as well, consider using only one of those.
Set a budget
Creating a budget can be tricky, but it’s important to sit down with your family and talk about spending and how to save. Your household budget should begin with a look at your necessary spending. Once those numbers are added up, look at what’s left and lay out the best ways to use it. You might decide to allot a certain amount for clothing or to start saving for a vacation or a new car. Whatever you decide, make sure you communicate it to the entire family so that everyone is on the same page. Doing this will help give you peace of mind as far as knowing what to expect each week and will help relieve some stress at the same time.
Look at your credit card use
Many of us rely on credit cards to get through the month, but if you can’t afford to pay more than the minimum balance, you’re only digging yourself deeper into debt every time you use it. Come up with a solid plan on paying off your cards and resolve to resist the temptation to open up new accounts when they are offered at retail stores.
Getting your finances in order is rarely an easy thing to do, but it’s absolutely necessary if you feel your family is overspending. Come up with a plan before making any big decisions, and talk to your loved ones about the best ways to stay on the right track.
-Article by Larry
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