We don’t like to tell you how to spend your hard earned cash, but when it comes to our customers we always have your best financial interests at heart. And as difficult it may be, we sometimes have to point out the obvious, even if that means your bad financials habits. Everyone has their personal money matters on how they want to keep track of, spend and save their cash, but there is always room for improvement. So we put together a few ways to let you know that you may not be as good with your money as you may think.
Do you know how much you earn versus how much you spend?
With money constantly flowing in and out of your bank account, cash withdrawals, bill payments and automatic charges, money can get overwhelming, to say the least. Off the top of your head, do you know your current income – annually, monthly and biweekly? If so, you’re on the right track. But part two is knowing all of your expenses for the month and how much of that money is coming back out of your bank account for bills and other expenses. Are your costs higher than what you’re bringing in? It takes people longer than you would think to recognize something like this because they think they are floating by each month. Because bill payments and automatic withdrawals (not to mention your daily spending) all come out at different times, people think they are managing paycheck to paycheck.
Our tip would be to talk to your bank, credit card company or financial planner and see if you can get any automatic and bill payments moved to a set day of the month. The first day of the month, the middle of the month or the end of the month are very common days people use and will make it much easier to see where your money is going when as it all happens on one day and you know you have to be ready for it. Which brings us to our next point on budgeting.
What’s your budget?
Here at GoDay, we’re all about staying on budget. And we’ve given you many different ways you can create a budget and stay on track. Because that’s the first step when it comes to saving money. Being on track financially comes from having a budget in place, even if it is something like a spending journal to monitor and keep tabs on what you’re saving versus what you’re spending.
So once you’ve figured out how much is coming in and what money is going out, these are the numbers you will need to set up your budget. And remember to include savings in that too! A lot of people think a budget is for “in the moment” spending when the best way to start saving is to budget for it.
What’s your family budget?
No matter how big or small your family is, there will come a time where you will have to evaluate your financial situation. It could be anything from aging parents to a growing family and all the stages in between. And no matter what stage you’re at, it all takes a financial toll on your wallet. So how do you stay on top of or ahead of your family finances? IT all comes down to how you budget and your financial priorities when it comes to family goals. When it comes to your family, you will reach many different life stages as both you and your family grow. Are you financially prepared for those coming changes?
Are you surprised by your bills each month?
You can be honest. There have been times we’ve seen our bills and have been shocked by the final number on that statement too. A big topic of discussion has been the rising hydro rates in Ontario and how some people cannot afford to pay their utility bills.
But it’s your credit card statements you shouldn’t be surprised by each month. As we mentioned before, you should always be keeping track of your spending and that includes making sure you are using your credit card wisely.
Are you stressed about money?
One of the key signs you can tell you’re not good with your money matters is if you’re constantly stressing and worrying over your financial means. The best thing to do is to eliminate financial stress and there are many steps you can take to do that and get better with your money. At GoDay one of our missions is to help relieve you of financial stress by getting you back on track with an online payday loan, not further behind. So how do you get that dark cloud of financial worry to stop following you around?
What’s your credit score?
Do you know what your credit score is? When was the last time you checked your credit score? It changes frequently and you never know when you will need it, but there are plenty of times a credit report may be required including as to be used as a reference or as formal documentation. Your credit score can show you things such as how much outstanding debt you may have, how your score is impacted by how many loans you acquire, the kinds of debt you have and multiple other things.
Having a good credit score can help give you some financial comfort when it comes to applying for things like a mortgage or lines of credit. A poor credit score can prevent you from being approved for many things from credit cards to even a new cell phone. But there are ways to help bring your score up over time but will take some financial discipline.
Do you have an emergency fund?
If push comes to shove would you be able to stay afloat financially? There are many things in life that can happen unexpectedly. Whether it is being let go from a job, an illness, accident or even something positive like a pregnancy, no matter the situation, have you asked yourself, “Am I financially prepared”? Being prepared in advance is the best way to handle any unexpected events that even the biggest planners may be unprepared for.
We’re talking about more than just your savings account, but being financially prepared for any situation. An emergency fund is also one of the best things you can do to help your finances in general and give yourself reassurance knowing that if something happens, you will not immediately be in a financial crisis. Creating a financial backup plan of the things that you could cut back on if needed or any sudden changes in expenses are required and makes it much easier to implement once you’ve assessed your situation. No matter your budget, there are many ways to start an emergency fund.
Starting with small contributions, treating your emergency fund as a bill and getting into a routine of contributing funds are only some of the small steps that can make a big impact in the future. Everyone’s emergency fund will be different depending on their situation. There are also various opinions as to how large an emergency fund should be. This leads directly into the next tip on why you should then make plans to seek expertise with any questions you may have in regards to your emergency fund and to help give a second look into your assessment.
Are you living within your means?
What does it mean when someone asks you if you’re living within your means? It sounds easy, right? Well, you would be surprised as to how much people are constantly overspending and thinking that things are within their means when they surprisingly aren’t. This is very common when it comes to materialistic goods. Living in a society where the latest gadget is a “must have” and brands have done a very good job at making us feel we “need” these things is one of the ways people are constantly overspending and finding themselves in debt. Do you fall fault to not living within your means?
Are you carrying debt?
We all have some form of it, those financial habits that we wish we could break, especially when it comes to tackling debt. But when it comes to debt management, it’s changing your thinking when it comes to spending. As we mentioned above about being surprised by your bills, we’ve talked about using your credit card wisely before, because if you’re making minimum payments, most likely you’re just paying interest from bill to bill and not actually tackling your debt, but accumulating more debt. Getting out of the habit of making minimum payments is one of the best ways you will start to see your debt disappear. So next time your credit card bill comes in, budget wisely to take that first step in managing your debt.
There shouldn’t be any extra expenditures when you’re already in a financial bind. Understanding how you got yourself into this financial situation is what also needs to be addressed. Did you miss a bill payment and the interest is adding up? Is it a big month in terms of expenses? Has there been an emergency where financial assistance is required? No matter what the situation, understanding why you’re in the financial spot you are is what will help you get out of that bind, but will also help you prepare for the future accordingly. Lessons learned!
Are you putting off saving?
We’ve all been there. The months we over spend and end up not saving. But before this becomes a regular habit, get yourself back on track by tightening the savings belt. It is always easier said than done, but when it comes to your money, we are way better spenders than we are savers.
Treat your savings account like a bill that needs to be paid each month. We’ve mentioned this before as one of our favourite savings hacks since there are many ways to do this. You can use automatic payments on the days you get paid to transfer funds directly into your savings account. With the money automatically transferred over, you will never even know you had it to spend in the first place! You can also transfer funds manually, set a goal for yourself of wanting to move a certain amount of bucks over into your savings and do that on the same day of each month for a year, you’ll see that account growing and be inspired to keep your new money-saving habits going.
We can all use more money, right? But when it comes to budgeting and your savings account, we all like to see those numbers rise. So when you’re starting to feel financially comfortable, that’s when you should be making smart financial decisions and figuring out what the next steps with your money should be.
What’s your retirement game plan?
When it comes to investing your cash, we’re not telling you to enter the stock market. But, contributing something to your Registered Retirement Savings Plan (RRSP) is something you will want to start sooner rather than later in life. Working with a financial advisor can help show you the many ways in which how contributing to your retirement can add up quickly over the years and investing financially in your future is something you won’t regret.
Life happens and there are times you may not be financially prepared for them. And that’s okay. So now that you know some of the key signs of why you may not be good with your money and how you can go about getting back on track. This will help with these everyday necessities that tend to add up quickly.
