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Feeling good about your finances can be life-changing. Here’s how to get started
From sipping a green smoothie to taking a few minutes to meditate, there are lots of ways we can help ourselves feel our best. But while you’re stocking up on supplements, don’t overlook your financial wellbeing too. Feeling good about your finances can actually lead to better sleep, happier relationships, and fewer serious health issues.
With that in mind, it’s no wonder that “living without financial stress” was one of the top ways Canadians described wellness on CIBC’s annual Financial Priorities poll.
So what exactly is financial wellbeing? In a nutshell, it’s feeling confident and secure about being able to meet your financial commitments. That might look like being able to pay bills on time, deal with unexpected expenses, and do things you want to enjoy life.
Just as with other elements of your wellbeing, such as your physical and mental health, financial wellbeing is about steady habits that add up. In fact, financial wellbeing is more strongly tied to behaviours than to income, according to the Financial Consumer Agency of Canada. That means that in a lot of cases it’s not about how much money you make but how you manage it.
Here are a few key ways you can boost your financial wellbeing at any stage in your life.
Know where your money is going
By looking at your income and expenses, you’ll see where your money is going so you can be strategic with your spending and even find opportunities to save. To get started, it helps to have a snapshot of your cash flow so you can see how much money is coming in and going out each month. Take the first step toward building your saving and spending strategy with CIBC’s Budget Calculator.
Rightsize your debt
Debt repayment is the number one financial goal for Canadians in 2022, and for good reason. Feeling like you can manage the amount of debt you have can make a big difference to your financial confidence. One of the most important things to do when figuring out if your debt is manageable is to look at your debt-to-income ratio. A good balance to aim for is 35 per cent or less.
Are you ready to shrink your debt? Making debt repayment a regular expense that’s part of your monthly budget can help you chip away at it. You don’t have to figure it out all on your own though. An advisor can help you explore different options including debt consolidation.
Give yourself a cushion
Knowing that you have a buffer for unexpected expenses, like trouble with your car’s transmission or a basement flood, can help you sleep better at night. But how big should your slush fund be? Ideally, you want to have enough savings to cover three to six months’ worth of expenses. It’s a good idea to keep your emergency fund in a conservative, open investment such as a savings account or a money market fund so your cash is there when you need it.
Live in the present, plan for the future
Life is meant to be lived, and nearly 70 per cent of Canadians say that spending money on experiences they enjoy can have the biggest positive impact on their overall wellness. That’s why one of the keys to financial wellbeing is striking a balance between short-term goals like saving for a vacation, and long-term goals like retirement. To help you see how much you’ll need to save each month towards your goals, try CIBC’s Savings Calculator.
Make it a team effort
Strong relationships and support are a vital part of your wellbeing, and that includes help with money management too. If you’re feeling unclear about whether you’re in a good spot financially, or unsure of where to get started, an advisor can help you take stock of your situation and create a plan that prioritizes your financial wellbeing.
The past couple of years have shown us how important it is to take care of ourselves, from getting enough sleep and exercise to staying connected with friends and family. Reframing money management as a form of self-care is a good reminder of how closely tied our financial wellbeing is to our overall wellness. After all, it feels good to feel good.
Visit the CIBC SMART ADVICE™ hub for financial advice for all life’s moments.
Advertising feature produced by CIBC. The Globe’s editorial department was not involved.