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, of being taken advantage, or the ups and downs in the stock market.
Whatever your stress, you can improve your relationship with money by becoming more aware of what’s blocking you from financial peace, and taking the steps to set yourself free.
Here are five ways to eliminate your stress about money:
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 with 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. 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.
A great place to start is Unstuck - How to Get Ahead Financially and Start Living the Life You Want, which is available for purchase on Amazon.
3. 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.
4. 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!
5. 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 or Money Coach 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.
Book a free initial consultation with a Money Coach to take the worry out of your money today.
Are you interested in learning about establishing a Spending and Savings Plan? Click below to download a complete set of worksheets.
Karin Mizgala, MBA, CFP® is the co-founder and CEO of Money Coaches Canada, the nation’s leading provider of advice-only financial planning. Offering unbiased, transparent financial advice, Money Coaches Canada and their 7 Stages of Financial Well-BeingTM helps clients move closer to life’s most important goals. Karin is the co-author of Unstuck – How to get ahead financially and start living the life you want and Your Money Map.