Money is one of the biggest causes of stress. It doesn’t matter if you’re a student working part-time or someone nearing retirement—money is just one of those things that can keep anyone up at night.
Almost half of Canadians (43%) say that not saving money is their most stressful financial habit, according to a recent poll from Interac. 25% said that overspending and living beyond their means also topped their list of worries, while not sticking to a budget worried 17%. Other concerns include accumulating debt (17%) and failing to pay credit card bills in full every month (16%).
Okay, let’s all agree that money can be stressful. There’s no easy way to get over stress, but according to Teri Murphy, Senior Manager, Corporate and Stakeholder Relations, Interac Association and Acxsys Corporation, a few small adjustments can help Canadians save more.
“Wise spending habits begin with creating and following a budget, but they certainly don’t end there,” says Murphy. “Simple tasks, like creating a meal plan, can help you stretch your dollar by ensuring you only buy what you need instead of what you might simply want in the moment, and potentially end up wasting.”
Having a budget in place is one of the easiest ways to save money, yet only 51% of those surveyed said they made a budget in the last year. If you’re new to budgeting, start by tracking all your spending for a month. With this information, you can cut out excess spending and start focusing on saving.
Even doing something as simple as switching to a cash-only budget can go a long way. When you pay with cash, you make smarter spending decisions since you’re physically watching your money disappear. With credit, people tend to just charge things and worry about costs later; plus there’s always the risk of interest charges.
Looking at all your financial habits
These surveys aren’t meant to probe deeply into the minds of those surveyed, but it’s interesting to see that 65% of Canadians believe they can improve on their financial habits, yet 73% say they’re on track to meet their financial goals. These results may seem contradictory, so that’s why it’s important to look at all your financial habits to make sure you’re on track.
“Setting realistic, measurable, and attainable financial goals is important for all Canadians looking to take control of their finances” says Murphy. “However, there are a number of financial habits that contribute to your overall financial well-being, including saving money, living within your means, and budgeting.”
It’s entirely possible that Canadians are on-track to meet their financial goals, but according Allan Small, Senior Investment Advisor at Allan Small Financial Group, HollisWealth, they may be underestimating how much they’ll need later in life.
“People don’t realize how much they will need to live the life they want later in retirement or even before retirement” says Small. “They usually don’t factor in how much inflation can eat away at their savings, and they underestimate how much money they will require to enjoy their later years.”
For this reason, it’s important for Canadians to pay attention to their savings and investments. Be sure to talk to your financial advisor on a regular basis and to review your financial roadmap every few years to make sure you’re still on track.
Money stress might be impossible to eliminate completely, but you can manage it by increasing your financial literacy. By understanding how your finances work, you can make informed decisions without stressing out too much. November is Financial Literacy Month in Canada, so be sure to keep reading the Ratehub.ca blog for some great articles to help you improve your finances.
Flickr: KMR Photography