Angela Iermieri | Financial Planner | Desjardins Group
Miriam suffers from financial anxiety. Every month she worries, feeling like she's losing control of her finances. Is she alone in these concerns? Far from it--money is the biggest source of stress for Canadians.
Enough's enough! Miriam wants to take the proverbial bull by the horns, but she's not sure how to go about it. What to do, where to begin?
As the saying goes, if you're headed to war, you need to know your enemy. Here's some ammunition to manage your financial stress.
1. Identify your sources of stress
It's hard to identify your biggest financial worries if you're lost in a swirl of thoughts. It's like not being able to see the forest for the trees. By taking a step back, Miriam can prioritize her concerns and work on them one at a time.
The main sources of stress for Canadians:
- Not having an emergency fund to cover unexpected expenses
- Financial obligations
- Excessive debt
- The pressure of having to save enough for retirement
- Their own or a loved one's financial security
2. Arm yourself and track your targets
Even though she dreads the idea, Miriam should make a budget. She knows she should get on this, but it's not easy to stick to it!
Knowing how much money is coming in and going out, where it's going and how much her financial obligations come to are her arsenal for launching her first battle: tracking intruders. By exposing the expenses and obligations that keep her from creating some financial breathing room, she'll have the power to make real-time adjustments and take back control.
2 simple tips to identify "killer expenses":
- Withdraw a set amount and pay cash only
- Track all of the expenses you pay for with your credit or debit card, including online and by phone and total them up often--ideally at the end of the day
For Miriam, it's the little expenses she doesn't see that cause her a lot of problems. She knows she should make this a priority, because it's these expenses she's lost track of that cause her to fall into a debt spiral. There's no magic way out, but there is a method. She first needs to reduce her most "expensive" debts. Check out these 5 steps to reducing debt.
3. Overcome the enemy
Once she's on more solid ground, it's time for Miriam to prepare for attack.
First offensive: identify what she wants to change to improve her situation.
- Reduce expenses?
- Increase income?
- Improve financial knowledge?
- Develop skills to manage her finances?
- Consolidate debts?
Regardless of what she chooses, she'll need guidance and support to reach her goals.
Second offensive: seek help.
She can turn to any number of resources for help:
- The association coopérative d'économie familiale (ACEF) in her area or other organizations that participate in the Fonds d'entraide Desjardins
- Her advisor (if she wants to review her repayment capacity and the structure of her debts to make it easier for her to repay them)
- The Personal Finance - I'm in charge program (ages 18 to 25)
Once she's launched her plan of attack, Miriam will be better equipped to make sound financial decisions. She'll accumulate victories big and small, and each one will improve her well-being by increasing her self-confidence and reducing her financial stress.
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