Posted 5 days ago
Article from Northumberland Today
The idea of taking control of your finances can seem like a daunting task given the alarming international headlines and the day to day financial stresses that we all have to deal with. However, taking back control of your personal financial world and improving on what you are already doing should not be a scary and overwhelming task. In fact, it can be quite simple if you are patient with yourself. Obtaining financial freedom takes focus and effort, but it certainly does not have to be complicated.
It isn’t hard to get overwhelmed about the world of finances these days; every time you turn on the television, radio or read a newspaper, all the financial news seems to be doom and gloom. Headlines are focussing on the European debt crisis, Greece needing additional bail outs, the Canadian and Ontario governments running deficits and needing to make cuts and news that our economy is experiencing slow to no growth. Meanwhile, many of us aren’t aware of the hypocrisy of the banking world. How is it reasonable that we read articles referencing economists and investors from the five big banks who are telling us that Canadians need to lower their debt levels, while at the same time branch banking employees are trying to give Canadians as much credit as possible. In many situations it is as ridiculous as giving a starving person a sandwich and then scolding them for eating it. Financial consumers need to be aware that banks are big business, and that the credit opportunities they offer are not always in the client’s best interest.
The next step toward taking command of your finances is to make yourself aware of where your money has been going. Review the last few months of your bank statements and list all of your monthly fixed and variable expenses. Put your entire financial picture onto a piece of paper or use a spreadsheet on the computer. Ask yourself: how many bank accounts, credit cards, loans and lines of credits do I have and do I really need them all? Once you can see it, you can simplify it. Start closing accounts you do not need, cancelling credit cards you don’t use, decrease your limits on overdraft protection and lines of credit. Ultimately, you won’t bury yourself in debt if you’re not giving yourself the opportunity to.
Once you have made a list of your monthly bills and expenses, see if you can save yourself some money and make life easier. Look at your list of monthly expenses and see if you can reduce your payments on bills like home and auto insurance, cellphone service, cable, Internet and home phone services; these are all areas that you could negotiate a better deal. Another way to make life easier for yourself is to arrange your bills in a way that is easiest for you to stay organized. Whether you set up all of your bills to come out the day after you get paid, or you arrange them to come out at the beginning or middle of the month, the idea is to pay your bills before you can spend that important money on other things.
Another great tool for harnessing in your spending is the creation of a budget. I can remember being in university and my mother always saying to me, “I don’t know where all your money goes; you need to make yourself a budget!” She was absolutely right. During those days, I just kept swiping my debit card without a clue of how much I was spending on a week to week basis; I could never seem to figure out, why at the end of the month, I was out of money. In hindsight, making a budget and holstering my debit card in exchange for cash in hand would have saved me a lot of unnecessary debt.
The final step is to motivate and challenge yourself to making positive changes to your finances. Knowing your finances, and working within a budget, does not have to be a thorn in your side. If you’re someone who buys a coffee every day before work, challenge yourself to make your own coffee at home; instead of giving away $1.50 every day, put that money into a jar and save it for something more tangible. Financial freedom doesn’t always have to be about giving things up, it’s about knowing where your money is and using it more effectively.
Sean Moloney, BA, is a Sun Life Financial Advisor. He can be reached at 289-252-2103, sean.moloney@sunlife.com or www.sunlife.ca/sean.moloney .
Article from Northumberland Today
