No matter who you are, you worry about money, at some point, to some degree. You may be worried how you will get out of debt or your car broke down and needs fixing or you need to do a major repair in your home, whatever your money stress is, never forget that it’s a normal part of everyday life and that there is a solutionto every money stress. You just need to take a step back, take a deep breath and tackle the money stress head on. Avoiding it or prolonging it, does not solve the problem. Making a commitment to your self, putting a plan in place and executing the plan, can solve any money stress problem.
I’ve put together through some handy-dandy research some of the more common money stress occurrences and how to tackle them. Shall we?
1. Money Stress: Living beyond your means >>>>>>> Solution: Going on a diet with your expenses
We’ve all done it at some point in our lives. I’m the first one to admit it and it’s no wonder I got my self into debt. I was going out too much, eating out everywhere, buying things I didn’t need and all of it via credit. Finally I was so fed up and stressed out, that I decided to do something about it and you can too. It’s actually very easy and after a few months (like 2), it becomes second nature.
Use shopping lists
Weather you are grocery shopping or shopping for clothes, go into your shopping adventure with a plan. Create a list of things you need and stick to it. Have a look in your closest or fridge beforehand. Look at the things you need and write them down. Don’t assume when you’re out and about, by trying to guesstimate. It always fails.
Cut your cable
Look for special offers by competitors from your cable company, than call up your provider and ask them to beat it. 99% of the time, they will offer you a discount of some sort. If you want to super save, cancel your cable all together and opt to buy an antenna for $20, which will give you free basic cable. That’s savings of $720 annually, on an average $60/month cable bill.
Reduce your phone bill
Ever since I moved out, I never had a home phone. It’s no use to me, as I have a blackberry and everyone can get me there. I don’t need to pay for two phone lines and neither do you. If you have a home phone, think of eliminating it and only stick to your cell phone. If you have a cell phone, call up your providers “Retention” department and ask them to give you a better plan and reduce your rate. Remember, you must be firm with them.
Shop around for Insurance
Recently I wrote a post on shopping around for car insruance and why it’s a good idea. You can save anywhere from 10-30% on average. Remember, all you have to do is ask. Some saving is better than nothing.
Save on the Utility Bill
It’s easy to do so. Contact your utility providers and ask about their peak times. Than was your clothes & dishes during non peak hours. Also, it’s good to change your light bulbs to energy efficient ones. They last much longer and will save you some more money there. Another good idea is to save on heating, by comparing rates from various gas providers. I just saved my parents some money, by switching from .39 cent/cubic meter rate to a .12 cent/cubic meter rate. It was easy and the new provider took care of all the paperwork too.
2. Money Stress: Eliminating your debt >>>>>>>>>Solution: Create a budget and cut your credit off
Like anything else in life, in order to be successful, you need a plan. Same thing, when it comes to eliminating debt. You need to create a plan and a budget and start executing it. I remember when I started blogging about 6 months back, I was in debt heavily and no plan in place. Today I’m happy to say that I’ve eliminated a good chunk of my debt, by simply following a plan I put into place. I eliminated the use of my credit (credit cards, lines of credit & overdraft) and created a budget. I follow the budget religiously and know where my money is going, how much money I can put away to save and how much I actually need for everyday living. Plus I am happier than ever and feel less stressed out. These two things, you sure can’t put a price tag on.
3. Money Stress: Unexpected car repairs >>>>>>>>>>> Solution: Have an emergency fund
The whole point of creating an emergency fund is for situations like this. If you don’t an emergency fund, it would be wise to start one. Personally I don’t believe in having large emergency funds, such as over the $5,000 mark. A good emergency fund of around $1,500-$3,000 is ideal. It will cover most of your everyday emergencies. If you save $90 per bi-weekly cheque, that’s $2,340 you can save annually ($90 x 26 = $2,340). Remember though, emergency fund is only supposed to be used in emergencies, such as car repairs.
4. Money Stress: Saving for Retirement >>>>>>> Solution: Create a Retirement Savings Fund & Invest
There are many ways to invest your money. Banks can’t wait to get your money and play with it, but remember, there are a lot of options and you have as much say too. Max out your RRSP every year. Not only will you get a nice tax break too, but you’re saving for the long term. If you’re thinking of saving for your retirement via low-risk investing, make sure you open up a TFSA account and invest via TFSA. There are many benefits to it, which I will not get into here, but read up on TFSA and RRSP accounts and the difference between them. Some good information points for Saving for Retirement and Low-Risk Investing would be;
TFSAs Key for Rookie Investors – Great article on TFSA written by John Chevreau
Everyone benefits from a TFSA- Benefits and why a TFSA is so good, also by John Chevreau
Retirement 101: Inside an RRSP- Basics of saving for Retirement & Investing
5. Money Stress: Car Payments >>>>>>>> Solution: Don’t buy more car than you can afford
I think we are bombarded with car commercials, almost more than anything else. Everywhere you go, every magazine, newspaper, online newspaper you look at, you are bombarded with car advertisements. Buying a car is never an easy process, but it can be simplified. First determine what your budget is and stick to it. Next, do the the math and look at how much you can afford monthly, if you plan to finance. Never-Ever, go into a car dealership and tell them you can afford “X amount” of car payment. The dealer will fit a car payment within your monthly budget, but amortize it over 60 or 72 months. Sounds good huh? Not really, because if you drive 30K KM annually, you will need a new car, even before you’re done paying out your existing one. Never buy more car, than you can afford, even if the deal is too good to be true. You know your finances the best and what you can afford, not the car dealer or finance company.
