Financial wellness: How to feel good about your finances

If you ever feel stressed out about your finances, you’re not alone. Almost 50% of Canadians have lost sleep because of financial concerns. Worrying about finances can lead to all sorts of health issues such as sleep problems, high blood pressure, depression and anxiety. Yet feeling good about your finances is not an impossible goal.

There are a few fairly simple steps that can help you take back control of your money,” says Brent Differ, Financial Advice Leader at ACU. “They can have you feeling good about your finances in a surprisingly short time.”

Managing your money

Brent Differ

Knowing where you want to be financially is an important starting point. Whether that goal is to reduce debt, grow savings or live within your means, you need to have it clear in your mind. Once you do, you can make your budget.

A budget is the building block of any basic financial plan,” says Brent. “You need to start by having a good grasp of where your money is going.”

It doesn’t matter if you use a pen and paper or a free budgeting app, such as Mint or Spending Tracker. Understanding how much you have coming in, going out and left over is the most important step in taking control of your finances.

Read: 5 free banking apps you’ll use every day

Reducing your debt

To get ahead financially, many Canadians are in dire need of reducing their debt. In fact, Canada carries the most consumer debt among the top seven economic nations. Thankfully, there are some simple ways to help reduce it.

A great strategy for eliminating debt is to focus on one bill at a time,” says Brent. “For example, if you have three outstanding credit card bills, focus on the one with the highest interest rate. Put as much money onto that card as you can while paying the minimum on the others. Once that’s paid off, move on to the next card.”

Another way of bringing down your debt and reducing your monthly interest payments, is to take out a debt consolidation loan, which pays off all of your debts while charging a much lower interest rate. This can free up more money, so you can pay off what you owe faster.

Read: How much should I save?

Building up savings

Once you have created a budget and reduced your debt, it’s time to grow your savings.

Setting up Pre-Authorized Contributions is the easiest way to save,” says Brent. “By paying into your savings account first, without even thinking about it, you’re far more likely to save successfully.”

Another tip is to put any extra money into your savings account when possible. “When you finish paying off a debt, switch that money over to your savings,” says Brent. “If you get a raise or a bonus, put that into your savings as well. Your balance will grow much faster without you even noticing the money leaving your account.”

Read: Save more money than you even realize with PACs

Growing your wealth

Once your savings have grown to a considerable level, it should be time to start talking to an expert to draw up a full financial plan.

Your financial institution should have an expert who can discuss growing your wealth with you,” says Brent. “By looking at your financial goals, they will be able to recommend the right portfolio mix for the growth you need with the level of risk you’re comfortable with.”

Read: 5 changes to grow your savings

Protecting your money for the future

While it might not be the first savings consideration, you should also plan to protect what you’ve built — even for well into the future. Some savers will skip these steps, but there are important reasons to address them now.

As soon as you have any assets, you need to consider writing your will,” says Brent. “This is the only way to make sure your money goes to your loved ones.”

Having adequate insurance is the next step. “Check with your employer’s HR department to see how much workplace life and disability insurance you may already have,” Brent advises. “If it’s non-existent or less than you’re comfortable with, look into taking out additional coverage.”

Many insurance providers recommend coverage that is around 10 times your annual income, but everyone has different needs, so you should discuss the amount with your insurer.

Read: 6 simple answers to make estate planning easy

You don’t have to do this alone

You don’t have to work towards financial wellness all by yourself. ACU’s advisors can take you through all of the steps we’ve mentioned and provide you with a full financial health check-up. They’ll also help you keep on track with regularly scheduled check-ins.

Arrange an appointment online to meet with an advisor who can help get you on the right track so you can feel good about your finances.

About Sean Cooper

Sean Cooper is the bestselling author of the book, Burn Your Mortgage. He bought his first house when he was only 27 in Toronto and paid off his mortgage in just 3 years by age 30. An in-demand Personal Finance Journalist, Money Coach and Speaker, his articles and blogs have been featured in publications such as the Toronto Star, Globe and Mail, Financial Post and MoneySense. Connect with Sean on LinkedIn, Twitter, Facebook and Instagram.

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