Take your finances by the horns

With much fanfare, the government’s Task Force on Financial Literacy was formed in 2009. The objective: to create a national strategy on financial literacy. The 13 suited members talked to a lot of people and, at the beginning for 2011, produced a report. Since then? Nothing. Zip, zilch, zero. You know why? Because there’s only one solution to the financial literacy issue: personal responsibility.

I’m tired of listening to whose fault it is that we are a nation of debtors. For years I’ve been telling folks that you have to know how much debt you can afford to take on. You have to make a budget and debt repayment plan to make your money work for you. You have to accept responsibility for where you are and take steps to get to where you next want to be.

Quit your complaining and get moving. If you’re waiting for some federal, provincial or local can-opener to pry open your skull and make money make sense to you, you’re going to be old and broke. And if you’re counting on the school system to educate your kids, you’re dooming them to the same sense of having no control that you’ve faced all your life.

You work hard for your money. Through rain and snow, searing heat and sickness, you drag yourself to work every day to make money. Shouldn’t you be spending at least one hour a month managing it?

There is no magic to money management. It’s not rocket-science, it is discipline. And you can choose to put up with the yuck of having to track your spending and stay on budget, or you can whine and moan, suffering the regret that comes from not doing the discipline.

Stop looking for the easy way out. Stop ignoring your day-to-day money behaviour. Stop over-reacting to the news on our economy, good or bad. The only way to feel safe, to be safe, is to build a strong personal economy. That means dotting all your i’s and crossing all your t’s. You’ll need:

1. A budget that’s realistic and that balances

2. A spending journal in which you track your spending

3. A cash flow into which you post your spending journal info so you can see how on track (or not) you are each month

4. An emergency fund

5. A curve-ball account for those small unexpected expenses that can throw a budget off track

6. Enough and the right kind of insurance

7. A will, powers of attorney for both financial and personal care, and a guardianship appointment if you have children

8. A debt repayment plan, and a commitment to living on cash until that debt is paid off

9. Credit cards with zero balances, which you  use to maintain your credit history but on which you never pay interest

10. An automatic savings plan through which you have money taken from your transaction account and squirrelled away for the future every month

That’s a start. There’s more, much more including, investing, retirement planning, saving for your kids’ education… and the list goes on.  But if you don’t have those 10 bases covered, everything else you do is just spitting in the wind.