If you find yourself worried about your financial wellbeing, you're not alone - and there are things you can do to make it better. Financial stress can stop even the most productive people in their tracks, causing sleepless nights, debt avoidance, and denial. While it's best to talk to your financial professional about what's on your mind, here are a few tips to start managing your stress on your own.
Tip #1: Make a To-Do List
Sometimes the most effective techniques are the simplest. When it comes to overcoming your financial stress, start by putting your to-do list in writing. Creating a clear list of what’s ahead can help it feel more tangible and doable. If you can, start with the easiest tasks and slowly work through your list, checking things off one by one. With a to-do list in front of you, there’s no need to bear the burden of remembering everything in your head. Starting with a list of tasks can help you build a plan of action more effectively.
Tip #2: Try Talking to Someone
While working with a financial advisor is recommended, it can still help to open up to a family member or friend in the meantime. Keeping everything bottled up and to yourself will only escalate your anxiety. If you’re able to, talk it out with someone you trust and be honest. Discussing your problems can ease the burden significantly. Your friend or family member may even have some advice or a financial advisor to recommend.
Tip #3: Review Your Spending Habits
Ignoring the situation may be tempting, but putting your financial obligations off will only make them worse. While some financial issues are more complicated than others, taking stock of your current situation can help build a better understanding of where you are today and what needs to happen. This often starts with adjusting your spending and saving habits. When it comes to addressing your current spending habits, there are a few things you can do right away:
- List out every income source you currently have
- Determine your debts (student loans, car payments, credit card debt, etc.)
- Keep track of all your spending manually or using a phone app
- Identify potential spending patterns or triggers (when you’re stressed, right after payday, etc.)
- Determine what changes you can make to your average spending to save more
- Avoid impulse spending
Tip #4: Make a Plan and Create a Monthly Budget
Creating and tracking a monthly budget is a great way to get in the habit of healthier spending - and healthier spending habits mean less financial stress.
To get started on creating your monthly budget, start by:
- Listing out recurring expenses such as gas, groceries, utilities, etc.
- Prioritize contributing to your emergency fund each month
- Set up automatic payments to avoid late fees or interest
- Determine where you may be able to cut down on spending (entertainment, clothes, etc.)
Tip #5: Establish a College Savings Plan
If you have a young one at home, paying for college is likely looming over your head. To ease this large financial burden, take the time now to establish or check up on your Registered Education Savings Plan, or RESP. This tax-advantaged savings plan is a contract between a subscriber and a promoter to encourage saving for future education costs. The subscriber can contribute to the account for the future student, while the promoters will pay educational assistance payments. The two different types of RESPs include family plans and specified plans, so take the time to figure out which is best for you.
Getting your finances in order is no easy feat. Identifying your main stressors and establishing a plan to address them can make a big difference in how you and your family feel about your finances. If you’re feeling lost, confused or overwhelmed, don’t forget to reach out to a trusted financial professional who can help make sense of your current financial situation.
Please consult financial, legal, or tax professionals for information specific to your situation. The information and material presented are general, may have changed since the published date shown, and should not be considered financial advice. LetsPlan.ca is published in Canada exclusively for residents of Canadian jurisdictions where our products and services may be legally offered. The services offered within this site are available exclusively through our Canadian advisors. While we often provide original content, Twenty Over Ten initially provided the subject matter for this post. It has since been edited, reviewed and approved by our Privacy and Compliance Officer. Advisors may only conduct business with residents of the province(s) in which they are licensed and registered.