Money matters: tips on how to be financially healthy
- EFN Staff | March 20, 2017
Standing at the cash register, entering my PIN number, I feel the anxiety build in the pit of my stomach. Did that payment go through yet? Did I choose the account that has the available funds? Please don’t decline, please don’t decline… I like to call this “Debit Machine Roulette.” We’ve all been there. Just like everything in life, cash comes and goes. Sometimes we’re high rollers tossing cash out to all our relations, and other times we are counting our pocket change to get over to toonie Tuesday. Many of us live paycheck to paycheck, it is a reality. Nothing to be ashamed of.
What we do with our money impacts our health just as much as how often we exercise, or what we choose to eat. Financial stress can be extremely impactful in our relationships, decision making and ultimately our basic living conditions. We aren’t taught in school how to balance a household budget. Some of the biggest life experiences we encounter are purchasing a home, or a new vehicle, getting married, moving to a new place, or travelling. All of these things require access to cash.
No, money isn’t “the be all end all” as they say, but struggling to manage cash isn’t a fun experience. So how can we make this easier on ourselves? I’ve reached out to Jessie Usselman from Affinity Credit Union to get the skinny on how to handle your cash.
Q: So Jessie, what advice would you give someone who is looking to get a good handle on managing their finances?
A: The first thing you can do is figure out where you spend your money. With so many convenient ways to pay these days (credit cards, debit cards, automatic payments out of your account) it’s easy to lose track of where your money is going and how much you’re actually spending. And cash can be even harder to track!
#1 Make Saving a Habit
If you put $100 a week towards an RRSP, your life savings could look something like this: Using an average rate of 3.5%, a 25-year old who contributes $5,000 annually to his or her RRSP will wind up with $412,079 at age 65. Yes, that’s right. $200,000 in lifetime contributions could turn into over $400,000. Not bad, not bad at all. Don’t worry though, you don’t have to start with $100 a week, start with $25 or $50 a month… the key is to start saving and keep saving.
#2 Shop Sensibly
As enticing as it may be to let your credit and debit cards go crazy, you’ll be doing yourself a huge favour if you shop sensibly and stay within your means. Yes, we know that doesn’t sound like fun. But, it’s a lot less fun to be overwhelmed by debt. Because when that happens, you won’t just have to sell your cool stuff, you might also be forced to accept a job that you don’t love, just to pay the bills. Not cool.
#3 Build a Good Credit History
Though you may still be a few years away from deciding what colour you’d like your new Benz to be, or whether you should buy your winter home in the Bahamas or South Beach, it’s never too early to start building a good credit history. And you do this by regularly paying your bills, which include your student debt, credit card debt, car loans, and other financial obligations.
In less time than you think, your good credit history will allow you to apply for loans and even a mortgage at an attractive interest rate, which can springboard you ahead much farther on your journey.
#5 Talk to Someone
Your personal journey towards a strong financial future doesn’t have to be long and difficult, and you definitely don’t have to go it alone. Talk to your family, a trusted mentor or a financial advisor at your local financial institution for advice and tips on building a strong financial future. We have a great group of advisors at Affinity.
Q: Are there any tools out there that can help keep us on track?
A: Yes! There are a number of ways that you can a keep record of where your money is going. If you’re old school, you can find budget books or budget sheets online and print them off. For a budgeting tool, you can check out the Financial Literacy section on the Financial Consumer Agency of Canada website at fcac-acfc.gc.ca . And if you keep you cell phone closer than your wallet, check out a mobile app to help keep you on track.
Jessie Usselman is a Community Investment Specialist at Affinity Credit Union. An engaged and passionate facilitator, Jessie has valuable experience in community assessments that support public, private and educational sectors in relation to financial literacy.