Fresh start

Coming to terms with your inner money anxieties

During my speaking engagements and TV appearances, I often ask the audience for a show of hands about who has experienced money anxiety – of any kind. It may relate to personal finances, budgeting, meeting credit card payments, paying rent, overspending on wild impulse purchases, or poor investment decisions. Typically almost everyone in the audience puts up their hand. It seems to be a universal theme in the early 21^st century.

The reasons are widely debated, and many digital pixels and YouTube videos have been spilled trying to explain it. Reasons can range from having an impoverished childhood to lack of financial education to a straight-out “fear of missing out” (FOMO) syndrome, which in today’s hyperconnected, influencer-controlled, social media world can lead directly to the first circle of financial hell.

Whatever the underlying reasons for your jekyll-and-hyde relationship with your finances, there are a few steps you can take right now to lift some of that anxiety.

1. Declutter and organize

Chances are your phone, tablet, and computer are cluttered with apps and websites that impact your personal finances. The trouble is, most of us let these get out of hand, and we keep loading new ones as they strike our fancy. The same goes for paper statements, invoices, and documents that still seem to pile up. That’s a sure sign of personal financial clutter.

To get back on the right path, separate your important digital services into a special financial priority folder or group that you can find easily. Keep it simple and high priority. These might include banking apps, credit card apps, investment or brokerage apps. Next, eliminate apps you no longer use (for example, old loyalty programs) and unsubscribe from retail and other promotional sites. Clean up your email in-box, and ruthlessly delete old messages.

It’s not a paperless world. So go through your home office, too, and shred old, unnecessary paperwork. Set aside one area in your home for your household financial paperwork. Check and cull it regularly.

2. Look at your big picture

Saving. Do you have anything at all left over at the end of the month? If you do, that’s your “saving.” A rule of thumb is that you should strive to save 10% of your monthly income (or whatever you can, provided you do it consistently).

Debt. Recent statistics from Statistics Canada show that in the second quarter of 2023, Canadians owed about $1.81 in household credit market debt for every dollar of disposable income. That’s a serious debt hole to be in. So look at your debt load in total: credit cards, consumer loans, lines of credit, etc. If you owe way more than you make, then it’s time to take some action. This should include everything from debt consolidation to cash flow management strategies.

Spending. If you have no idea what you spend each month, and simply rely on your debit card or app to be rejected when you run out of money, you have a problem. The solution is a simple one: make a budget. Then find places to cut back, economize, or re-set spending, so that at a minimum you’ll target your monthly income to exceed your monthly spending.

Investing. How is your portfolio performing? To get a fresh start here, put the trading window on pause and have a look at your statements. Check your asset allocation and trading patterns. Are you spending too much on trading commissions as you try to “beat the market”? Are you ahead of the game or behind the eight-ball? If you don’t know, don’t have any benchmarks, and can’t assess your asset allocation, it’s time to step back and make a plan.

3. Re-visit your financial plan

Here’s how to make a fresh start on fniancial planning: Gather all your necessary personal financial information to get a clear picture of your current financial situation. List your goals, needs and priorities, identify and evaluate strategies. Develop a workable budget and cash management strategy to control spending and manage personal debt (see above). Integrate this with a savings strategy connected to your investment accounts, RRSPs, TFSAs, employer pension plans, RESPs, non-registered plans, to meet your financial goals and match your risk-tolerance level.

If all this seems daunting or you just don’t have the time, consult a financial planner through a referral from a friend, relative, or colleague.

4. Make an action plan

Finally, if your fresh start is from ground zero, take a deep breath and take small first steps. Getting highly aggressive about your goals and trying to achieve everything at once is tempting. But it’s a recipe for frustration and anxiety, because it can be overwhelming. Be patient with your financial goals. Start with the easy ones, like the decluttering I talked about earlier. Break down your goals into smaller chunks and set daily reminders about what has to get done to meet your deadline. Once you’ve crossed a goal off the list, start on the the next one. (You’ll find it gets easier as you gain confidence and success.)

On a personal note, I’ll be taking a break from writing about personal financial planning and investing, as I focus more on keynote speaking, media appearances, and wealth consulting. Visit my new website for updates and follow me on LinkedIn and Instagram.

Robyn Thompson, CFP, CIM, FCSI, is the founder of Castlemark Wealth Management, financial mentor, and keynote speaker. Find her at her new website Robyn Thompson Money.

Notes and Disclaimer

The foregoing is for general information purposes only and is the opinion of the writer. Securities mentioned are illustrative only and carry risk of loss. No guarantee of investment performance is made or implied. It is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice. Please contact the author to discuss your particular circumstances.