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Pattie Lovett-Reid

Chief Financial Commentator, CTV


It is time to get real about your finances and make some serious progress on your bottom line.

Whether you are a senior in retirement or a student graduating with debt, we can all feel the same: Overwhelmed. Markets are choppy and interest rates are at historical lows. And odds are rates could go even lower before they head higher. Add to this, cleaning up your balance sheet can feel labour intensive, and, quite frankly, many think they are fine and will hesitate implementing a plan much less pull back on spending or create a budget.

A low interest rate environment is not to be cheered as it signals global economies are slowing down. The knock-on effect could see the job market stagnating – or worse, retreating. If you lose your job as debt levels of Canadians soar to record levels, the odds are you won’t be able to weather the financial storm. If you are in retirement searching for yield, it could result in more risk than you should take.  However, sitting in cash after taxes and inflation you run you the real risk of losing money.

My mantra of investing in quality companies, staying true to your asset allocation, and trying not to time the market holds true today. Take control where you can – that means implementing a budget and sticking with it.

Before you think budgets are simply distasteful, they could be the medicine that turns your financial health around. Consider the following.

1.Budgets work. That doesn’t mean you have to track every dime you spend but you do need to set some boundaries and know where you are spending your money. The act of tracking what you plan to spend versus what you actually spend could prove to be very insightful.
2. Like calorie counters, budgets don’t have to be labour intensive. There are so many apps out there that can automate your transactions and all financial institutions offer them.
3. Stop having an all-or-nothing mentality. It is not the end of the world if you spend when you shouldn’t once in a while. It’s more concerning if it happens daily.
4. Use cash. Numerous reports support the thesis that those who pay with cash simply spend less.

Budgets are not only for students, those in debt, those in new relationships, or retirees – they are for all of us. Living below you means is what will get through the market volatility, economic uncertainty, and financial turmoil.