Force yourself to manage your finances

No one else is going to do it for you. It’s one of your biggest day to day responsibilities – yet many people have no plan, and no clue.

Okay what does this mean? Am I talking about the dreaded “budget” word?

Everyone talks about budgets and very few of us actually have one or pay attention to it. Does that mean they are a bad thing? No – they are great – but only if used properly.

Managing your finances comes down to a few basic things. Most people these days have access to a personal computer – this process will go much smoother if you use a simple spreadsheet. At the least, it will do the math for you.

1) Have a list of all planned expenditures in the coming year.

Not everything is regular and monthly. Property taxes, kids’ activities and camps, car and home maintenance, vacations etc. Make sure you are setting aside enough money to take care of these as they arise.

2) Organize all your important papers, statements, insurance policies, warranties, receipts, vehicle and home ownership, etc.

You can buy a small file cabinet or even a couple of storage boxes from Staples. A box of file folders and labels, and you’re good to go.

Set it up once, and then let the system take care of itself. Every new piece of paper that comes into your home will either end up in the garbage, or filed properly in its rightful place.

3) Know what you have and what you are doing with it at all times

• Track your spending and your income from all sources

• Track all your bank accounts, savings accounts, investments, RRSP’s TFSA’s etc.

• Track all your credit cards, loans, and lease obligations

Tracking everything is fine – but then what? The numbers in your worksheet will tell you very quickly what is working and what is not. You will know what you have to change to get things back on track.