Money and the things that matter
Growing up, I didn’t really understand money. As a child, I had a bank account which I’d deposit birthday and Christmas money into, and even though I was naturally pretty good about saving it, I didn’t have any goals or specific reasons for saving. I only developed a greater appreciation for, and understanding of money, when I began working and living on my own. It was then that I discovered saving and planning for that next getaway was something that I enjoyed.
My job today, as a financial planner, is to help people make sound decisions about their money. To make it grow so that it lasts a lifetime and beyond, and to use it in ways that align with their needs and values.
Money is important, but you should remember that it’s really just a tool that lets you achieve something you value. That could mean paying off debt, taking care of our health, spending time with family and loved ones or enjoying new experiences. Whatever your financial goals are, you’ll need to have a healthy relationship with money to achieve them.
What does money mean to you?
Money shouldn’t be your primary life goal, but financial health should be high on your list. Having enough money to be able to pay your bills each month, provide for your family, give back to your community and have a happy, carefree retirement are some of the goals that are important to many of my clients. Setting up a strategic financial plan is, of course, key in helping you attain such goals; however, there are other ways you can set yourself up for success. Here are a few ways you can improve your relationship with money, so you can focus on enjoying the things that matter most.
Pay attention to it
One of the simplest things to do is to pay more attention to your money. If you don’t typically track your expenses or set a budget, you may want to begin doing this for a few months to get an idea of where all your money goes. You don’t need to track every single purchase, just enough to see what you spend your money on. This is a good first step towards improving your competency with money, and potentially making beneficial changes.
It’s also a good habit to check your bank accounts every few weeks. By doing this, it forces you to take the time to make money a priority. Checking your accounts regularly will help you see where you’re making progress, and give you a reason to pat yourself on the back when you’ve made improvements. As a suggestion, you can prepare a simple net worth statement of your assets and liabilities. I recommend that you do this at least annually. This would provide a method to document and monitor your overall progress.
Set goals and achieve them
If you haven’t already done so, take time to think of some goals you’d like to achieve with your money. Write them down so you can monitor your progress, and review your list regularly. Depending on your stage in life, your goals may change from time to time so you should adjust them accordingly.
Many financial goals require budgeting and saving. Set aside a portion of your regular cash flow for these goals. You can automate this by setting up recurring payments from your paycheque to a separate savings account.
You may also want to create incentives that will motivate you to meet your goals. It could be something simple like once you’ve accumulated $10,000 in savings, you can buy the latest gadget you’ve been wanting or take that weekend trip you’ve been thinking about. If you want to take it a step further, perhaps as extra motivation, you may even want to consider punishments for not achieving your goals. A website that I recently came across called stickK (https://www.stickk.com), allows you to set any goal you wish and sign a commitment contract, where you would be “punished” for breaking that promise.
Being disciplined is often the key to success. Ultimately, if you miss a goal, don’t beat yourself up – as long as it’s the exception, not the rule.
Avoid comparing with others – focus on yourself
It’s common to compare yourself with others. This may lead you to believe that what’s important to them should also be important to you. When you feel that others around you have achieved more than you, it can lead to dissatisfaction and unhappiness. But keep in mind that appearances can be deceiving. The problem with watching others is that you only see the image that is being portrayed to the outside world. You might be missing the true picture. Perhaps others are drowning in debt or living a lifestyle that is unsustainable.
Remember: it’s not a competition. What matters is not how much you have, but that you make the most of it.
Focus on yourself and don’t let society dictate how much money you should have. This will allow you to put your energy toward what’s important: you and your goals.
As you continue to improve your relationship with money, you’ll find that small adjustments in your habits can lead to big changes. Ask your financial planner how they can help you incorporate healthy financial behaviours into your plan, so you can relax and enjoy the things that matter.
Wesley Fong, Financial Consultant, T.E. Wealth, a trademark and business name of iA Investment Counsel Inc.