Jan. 7, 2019
Worried about money? Join the crowd.
If you're like most Canadians, you spend an hour a day fretting about finances. And if you're one of the worst worry warts, you're wasting an average 16 hours a week.
Those were among the findings of last summer's survey by Capital One Canada and Credit Canada Debt Solutions. The online poll of 1,534 adults also revealed that 44 per cent believe their financial situation negatively impacts their mental health.
So here's an idea: channel that time and angst into a money makeover.
You won't be alone in resolving to turn over a new (year) leaf. In another survey - this one by direct bank Tangerine in late 2017 - almost a third of Canadian respondents pledged to improve their financial health when the calendar turned over.
Of those, 45 per cent said they planned to spend less, another 41 per cent said they'd save more, while 31 per cent vowed to pay down credit card debt. Money management experts maintain that with a realistic approach, commitment - and perhaps a little guidance - those three resolutions are reachable.
Paulette Thompson is counsellor manager at Credit Canada, a non-profit organization providing free credit counselling and debt consolidation services. She acknowledges that personal finance is still "the elephant in the room" as a topic of conversation.
As a result, "people don't realize how many of us have to have a budget and stick to it."
She offers herself as an example: With plans to take a mini vacation in Quebec City, Thompson kept a Post-it note with her destination written on it in her wallet as a reminder of what she was saving for.
"And it works!" Thompson says of the little trick that helped her save up the cash for her trip. "It makes you think a bit more about every purchase you're making."
Adopting new financial habits "might seem overwhelming," observes Thompson. But she says the key is to set realistic goals, draw up a spending plan and budget you can live with, then follow it - taking baby steps, if necessary.
It's about "money mindfulness" and understanding all the pieces of your financial picture, says Patrick Ens, vice-president of strategy and brand for Capital One Canada, a financial services and credit card company.
Ens recalls when his own spending habits took an unhealthy turn. After moving from uptown Toronto to work downtown, his daily lunch bill doubled from $5 or $6 at a grocery store to between $10 and $15 in a food court. So he employed a "mixed bag" of solutions by buying groceries, packing a lunch and occasionally eating in the food court.
Now a lunch tab averaging $5 to $7 "makes me feel more in control," says Ens, who recommends getting a good handle on how income stacks up against spending needs and debt repayment.
Ask yourself, "Are the things I'm spending money on contributing to my health and happiness or to the stress I'm feeling?" he says, adding there's an abundance of tools and resources available to help figure it all out. "You're not alone."
Some practical tips to help reach those new year's goals:
Paulette Thompson tends to shop on her way home from work so she sets a 4 p.m. online alert reminding herself about her financial goals.
Thompson treats herself by loading a Starbucks gift card with $50 a month - but when it's gone, it's gone.
A family of four could spend $20 less a week at the supermarket by buying generic or private labels instead of name brands, according to U.S. personal finance guru Dave Ramsey.
Figure out how much you can afford to put aside weekly or monthly, then set up automatic transfers to a savings account, suggests Patrick Ens.
Thompson puts money into a type of savings account that takes 24 to 48 hours to access. The delay means she's not as tempted to spend it.
Avoid interest charges on overdue payments by arranging automatic payments online or setting phone reminders before the due date, suggests Credit Canada.
Pay off credit cards instead of making minimum payments. For example, paying off a balance of $1,000 at $25 a month would take 14.7 years and cost $1,464 on an account charging 20 per cent interest.