Most people stress about money. For some, it’s
about making ends meet or family conflicts, for
others it’s about long term financial security, being
taken advantage of or the ups and downs in the
stock market. Whatever your stress, you can
improve your relationship to money by becoming more
aware of what’s blocking you from financial peace,
and taking the steps to set yourself free.
1. Live the Life that You Want
If you are waiting to reach some magic number in
your bank account or to be debt-free before you
start living the life you want, you are probably giving
money way too much hold over your life. While it’s
important to pay the bills and to be financially
responsible, a healthy relationship to money comes
from using money to support your dreams and goals,
not as an end in itself. So, be clear about what you
want your life to look like, get your financial house in
order and align your
money with your life.
2. Look at your family background
How did you parents handle money? Were they
extravagant spenders or excessive savers? What
messages did
you pick up about money as a child? Chances are
the impact of these messages are buried pretty deep
and could be influencing the way you handle money
today. You might have adopted the same
dysfunctional behaviors and beliefs as your parents
or you might have swung to the other extreme –
spending recklessly to counteract the penny pinching
attitude you grew up with. The key to freeing
yourself from the stresses of past conditioning is to
bring these memories to a level of awareness and to
take a good hard look at how this might be affecting
your relationship to money today.
3. Communicate with your spouse
If you have had disagreements with your spouse
about
money, you know how stressful and destructive they
can be to a relationship. In fact, money issues are
considered to be one of the major causes of
divorce. As difficult as it is to talk about money
issues, communication is essential in working
through
financial woes. Set a specific time aside to talk
about money concerns and involve a third party
(coach, counselor, financial planner) if the
discussions get too emotionally heated. Try to focus
on mutual goals, be clear with what your needs are
and try to avoid blaming your partner. And be
patient - your spouse is probably struggling with as
many mixed messages about money as you are.
4. Educate Yourself
How many times have you met with a financial
advisor, nodded your head, but really had no idea
what was being said? The financial and investment
world is increasingly complex and if you don’t
understand the language of money, you can be left
feeling very vulnerable and uneasy. Even if you work
with an advisor that you trust, the only way to truly
overcome this anxiety is to educate yourself about
money. Take a money course, read a book on
financial planning or look for an advisor who focuses
on financial education. You don’t have to become a
real estate guru or an expert on the stock market,
but make sure you are delegating, not abdicating
responsibility for your finances.
5. Get out of debt
Debt limits your options, simple as that. The
more
debt you have, the less control you have over your
life and your choices. Nothing causes more
stress
than working at a job you don’t like just to make your
monthly credit card payments. While it may be hard
to avoid incurring some debt (home ownership for
instance), make sure you have a plan for repaying
the debt as quickly as possible. Try to resist
the convenience and reward incentives of credit
cards. You might get a free trip to Saskatoon but
the real cost could be your overall financial
well-being.
6. Live within your means
According to Stats Canada, over 50% of
Canadians
spend more than they earn. No wonder we’re
stressed about money! The most important financial
principle (no, it’s not the latest stock tip) is to figure
out how much money you need for your current
lifestyle and how much you need to save for future
goals and dreams. Then, find out how much income
you earn after taxes and deductions. If you spend
more than you earn and have nothing left over for
savings, reduce your expenses or find a way to make
more money. There is no easy solution here, just a
cold, hard look at the financial numbers. While this
exercise may be challenging, the buck stops here,
literally!
7. Find out how much you need to
retire
Retirement (or financial independence) ranks as one
of the top financial goals, but most people have no
idea how much money they will need. With so many
immediate financial pressures, it’s easy to resist or
avoid thinking about the future. However as
uncomfortable as it may be to look at our finances
today, it will only get harder tomorrow! So give
yourself
the gift of peace of mind and ask your financial
advisor to help you figure out what you need to do
today to achieve the lifestyle you want in
retirement. Taking control of your finances can
be
challenging, but the rewards of financial peace of
mind and security are well worth your efforts. I
guarantee it!
