Friday, March 11, 2022 / by Mario Daniel Sconza
4 Methods to Melt Your Financial Stress
Financial literacy is the key when it comes time to act and get yourself out of a financial jam. If you lost your job tomorrow, would there be a list in your head right away of things you could do to hang on financially…. or would you just be at a complete loss?
Knowing how to assess the available options and create a plan without getting overwhelmed or feeling lost can greatly reduce the stress that goes with financial issues. However, even with all the financial literacy in the world and the best laid plans, it’s impossible to completely eliminate stress from the road to financial wellness — so how do you cope?
1. Have a clear picture of your financial situation. Do you know your average monthly spend? Do you know how much you owe, the interest rate on your debts, and how much you pay each month in interest charges? Have you ever tracked and categorized your expenses to identify areas (car? dining out? vacation? home improvement?) where you could cut back if required?
Avoiding these questions is understandable because the answers may lead to some hard lifestyle changes, but not knowing these basic facts isn’t helping your stress levels. You need to confront the situation, collect and analyze your data, and then start creating a plan of attack to address any issues.
2. Don’t be ashamed and accept your mistakes. You will have to live with any poor spending decisions from your past. Regret and anger won’t make that vacation you took on your credit card disappear. As financial educators, our advice is to move on from any emotional reaction to past mistakes.
That credit card vacation is long gone, just focus on your plan to channel more money towards paying for it! If you need to decline dinner and beers with the gang because you want to put that $75 towards your card, then just come out and say it, “Sorry, can’t really afford a big night out this week”. More than 50% of Canadians live paycheque-to-paycheque, so it shouldn’t surprise many of your friends!
3. Set small, achievable financials goals to bolster your confidence and measure progress. For example, open a TFSA and put in $100 a month, or add $100 to your monthly minimum credit card payment. A hundred bucks might seem like a modest amount, but it is a realistic goal that will get you started.
The effect could also be a lot greater than you imagined. Did you know that putting a $100 month in a TFSA ($1200 year) from age 18 to 65 with average market returns will leave you with almost $400K! Paying the minimum 3% payment plus $100 on a $5K credit card debt will cut the time required to pay off the balance in half (from 50 months down to 25 and save you $1200 in interest charges!).
4. Get inspired and stay motivated. We give free webinars every week that provide plenty of facts and inspiration, but we aren’t the only fish in the sea.
Follow a YouTuber or blogger that you really connect with, reach out to a support group, hang a goal chart or progress tracker on the wall, talk with a friend or relative who has the same issues and work together, book one of our free financial assessment calls, inquire at work about employee wellness programs — there are lots of methods and resources available even with a limited budget. It’s critical to maintain a positive attitude and don’t beat yourself up — there are plenty of others in the same boat!
Enriched Academy believes the ultimate goal is to completely eliminate financial stress by building your passive income, so you don’t have to go to work everyday to pay the bills (join this webinar to learn how to get started). Achieving this goal will take some time and there is bound to be some stress along the way. Learn to cope and stay focused on your goals!
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