3 Steps to Taking Control of Your Finances
What does being in control of your finances mean? It’s a combination of understanding where you stand financially, spending less than you earn and having confidence in your ability to make financial decisions. If you want to reduce stress and anxiety over your finances, following these three steps can help:
Pay Attention to Cash Flow
Spend less than you earn. This means knowing exactly what you have coming in (income) and what is going out (expenses). Not knowing these two numbers can lead to undue stress and anxiety and a lack of control over your money. A common mistake is not accounting for the quarterly or annual expenses (i.e. taxes and insurance). Plan ahead to ensure you have the cash to cover these expenses when they arise.
Do you know what your investment options are? There is a big difference between GICs and stocks, mutual funds and ETFs. There are pros and cons to each type of investment, not to mention varying levels of risk and opportunity. Take the time to learn the basics so you can make better investment decisions and understand how those decisions impact your life goals.
Protect your family
Have you planned for the unexpected? What would be the impact if you were unable to work? Who will be the beneficiary of your estate? It’s important to look at the impact from potential scenarios to ensure you’ve got the coverage in place to protect your family.