Written by Jenna Trollope
My mother has a great line for anyone who has no clue what is going on with their funds. She says they are an ostrich with their heads in the sand.
The image is amusing, but the reality of that situation is problematic. I do not expect you to know how much is in your TFSA at any given second. That is unrealistic for anyone who is juggling all the responsibilities of adulthood, but make sure it is a regular part of your routine.
You should check your accounts at least once a month to ensure your payments have cleared and there are no transactions you were not aware of. Most creditors will report a payment as past due to the credit bureaus in Canada once it is 30 days late, so checking on your accounts monthly can help you maintain your credit score.
There are many faces of finance, or personality types we can encompass when it comes to managing money. “The Investor” loves to take risks and they are confident they can “beat” the market, but a study from the University of California found 82% underperform the market because they trade instinctively rather than strategically. “The Big Spender” uses money for love and attention and we would see them as a consumer of goods. As mentioned earlier, “The Ostrich” would rather ignore their investments and hope for the best, but this is not a good long-term strategy and the longer they ignore the issue the worse it gets. “The Saver” hates taking financial risks and is hesitant about investing or spending their money at all, and they usually were raised in an environment where money was tight. Finally, “The Debtor” is consistently broke, they spend more than they make and do not try to get their finances in order.
Personally, I have a terrible memory for mundane tasks. I care, but if it isn’t in front of my face, it doesn’t exist. I am a set-it-and-forget-it kind of girl, so nearly all my regular payments are set up to withdraw automatically. Many banks offer reminders to let you know when your regularly scheduled withdrawals are coming up. However, if sitting down and going through all your bills paying them once a month is what works for you, keep it up. It allows you to consistently track your spending and see where everything comes and goes.
Which personality do you relate to? Or do you see your friends and family exhibit any of these behaviours?
Reflecting on your spending habits can help you identify which money personality suits you and figure out a system that works best.