Track your spending for a solid 30 days

It’s been a challenging year for finances and your income and expenses have almost certainly changed. You may have maxed out your CPP and EI contributions and are experiencing higher paycheques. Your income may have slid backwards due to a lack of work. Costs for staples like food and nice-to-haves keep going up, adding to your costs.

Track your expenses for 30 days — literally everything, no matter how big or small the amount. As expenses go through your accounts, pay attention, glean insights about your behaviours and costs, decide if you want to/can make changes. Then rebuild your budget so the money coming in is enough to cover what’s going out. This thorough expense review can trigger bigger money moves you may have been putting off, like selling a car, or even moving.

Look at how far you’ve come with your finances

Sometimes we get bogged down in the details and forget how far we’ve come. If you’re a tracker of net worth, look at what it was three to five years ago and compare it to today. Celebrate what’s gone well. Acknowledge what needs to change. Know that the only way your net worth gets bigger is if you grow your assets (saving and investing) and reduce your debts. If you’re struggling to make your net worth grow, it’s your cue to book in with a financial planner or money coach to figure out what changes need to be made.

Your investment statements are important. Don’t glaze over them

They’re boring; I get it. But you’ll only learn how well your investments are doing by reading the table in your investment statements on your rate of return. I recommend focusing on the returns for longer periods, say five, seven or 10 years. Those longer intervals tell a more true tale of how well the portfolio is doing. If all you’re seeing are negative returns for those time frames, have a conversation with your adviser and possibly make a change; to the contents of your portfolio, your risk tolerance or the adviser themselves.

For a reference point, over the past 50 years, the S&P 500 has returned over six per cent annually when adjusted for inflation and dividends (and over 10 per cent when not adjusted for inflation and dividends). In other words, if you’re a balanced investor and not earning somewhere between six and 10 per cent long term, your portfolio is performing below the market average.

Make a plan to feel better about your finances

Feeling strong financially is linked to confidence and consistency; both are key to financial wellness. Build a handful of personal wellness items into your budget: hire a money coach who specializes in both financial planning and money psychology; commit to learning something new about financial planning every month; track your spending using an app that’s fun and easy; make a money date with your partner each month to organize your budget; use your benefits to see a therapist if you have experienced financial difficulties. These can all help you feel better about your financial situation.

Keep the savings habit going, even if small

Habits are powerful and fuel the consistency needed to achieve important goals like retirement readiness down the road. If you’re tempted to scrap that TFSA or RRSP contribution completely, see if you can dial it back first. That way you keep the habit going, and can adjust back up when times are better.

Go easy on yourself. If you need a complete financial reset this fall — maybe you’ve gotten divorced recently or lost income — take it one step at a time, starting with a fresh budget, good habits and hopefulness that it’s going to get better.

Author: Leslie-Anne Scrougie for The Toronto Star