I have to tell you something up front. I've never been very good with my finances. I think it has a lot to do with my financial education or rather the one I didn't really receive when I was young.
Anyway, I've always been a YOLO (You Only Live Once) type and enjoyed life, spoiled myself and have no regrets. You have to understand that I left home at the age of 18. So I had to support myself fairly early in my life as a young adult: rent, college and university studies, travel, etc. I was quite responsible, I must say, but the whole financial planning, saving and budgeting aspect was nebulous for me for a very long time. To tell the truth, I did not attach any importance to this aspect of my life. Although I have been self-employed since 2005 (i.e. without any real salary guarantee), I have never planned my retirement or an emergency fund. I have always lived from one contract to another. I know, it's terrible, but hey, we're here to discuss it, right?
It was when my daughter arrived that I got my wake up call. 38, no savings, no regular income, noRRSP, no TFSA or whatever. Single mother, without financial support from the father, self-employed, entrepreneur… you see the type. Very quickly, I knew things had to change. As long as it was just me, I didn't really see the urgency of taking charge of myself on the finances side. But with a dependent child, it was simply impossible to continue in this line. It was unthinkable, even irresponsible for me to imagine raising a child without knowing if I could meet his basic needs. So that was the starting point for my awareness and the work I did to make sure my daughter never lacked for anything.
I know it's hard to talk about these things sometimes. Money and finances are taboo subjects, but not talking about it doesn't help. To pretend to be or to pretend to have does not change the reality of the situation in which we find ourselves. Turning a blind eye only makes things worse. The key for me is to talk about it and help each other. I can say that my situation has really improved and that I am proud to see how far I have come in less than two years to have good financial he alth. My goal is not to be super rich, my goal is to achieve financial independence that will allow me to have a safety net and be free.
I'm not exactly where I want to be, but I'm on the right track and here are some tips I'd like to share with you to help you take control tooof your finances:
Facing reality
It's easy to pretend our debts don't exist or never look at the amount in your bank account, but that's the worst mistake. Forget the adage "Fake It Till You Make It", it's an express road to bankruptcy. My first instinct was to take stock and visualize all my debts to get a realistic picture of the situation.
Then I called a friend who is a bank manager. I asked him for advice to see more clearly and put my finances in order. His advice was invaluable. He explained to me what to do to improve my credit and made me understand different important aspects of asset management. Ex: have accounts open and schedule direct debits to be sure not to miss payments. This can help improve your credit fairly quickly. Or, owning a credit card and always paying the full balance (not just the minimum required). Simple things, but with real impact.
No control without a budget
Then, with the help of a friend, I learned how to budget. My first personal budget, I did it when I was 40. Proof that it's never too late. When I realized how many dollars I was spending on restaurants and other nonsense, it shocked me. Using the expense classification options offered to me by my banking institution, I was able to have a clear picture of my expenses in order toto take the necessary decisions to rectify my situation. Via my bank, I created a budget and I categorized my monthly expenses by imposing limits on myself by category. This way, I have full control over my ins and outs and a constant reminder of my limits. Not a day goes by that I don't check all my transactions and my bank account. I try to avoid using my credit card and centralize all my expenses on my debit card to have the maximum follow-up on my expenses. It's crazy, but thanks to this exercise, I managed to save a significant amount of money in six months. If your bank has the expense budgeting and categorization option, these are definitely tools to use.
Getting Fairly Paid
For a long time, 10 years more precisely, I had a regular client who offered me acceptable fees, but well below market value (being an NPO) and my value given my experience. With clear goals, I knew I had to ask for a raise and monthly installments instead of the three installments a year I used to get in the past. So I took my courage in both hands and made my requests. To my surprise, they accepted all my conditions. So I now have a regular monthly income that allows me to have even more control over my budget. To achieve financial autonomy, we must have an income capable of leading us there. It is therefore important to havean attitude in line with your objective. Don't be afraid to ask for what you think you're en titled to.
I did the same for a project I was volunteering for. I now receive a small monthly payment for my services. We must dare!
Even though I'm growing my business right now, unlike what I would have done in the past, I've decided to keep recurring assignments until my business takes off and I can pay myself living wage.
Have goals and save
I told you earlier, I never saved in my life, but with the dream of buying a house, we all agree that I had to get on it. Planning for my retirement is also a priority for me, so I had to find ways to save. With my budget, I was able to identify the expense items that I could reduce to save money. I have opened various accounts (RRSP, Down payment, Children's Education Savings, Vacations) via my banking institution and I deposit all my surplus income there in addition to having programmed in my budget a monthly amount dedicated to its various accounts savings, which are withdrawn automatically. Automatic saving is a great way to make sure you commit to an amount and stick to it.
To reach my savings goals, I took a few columnist contracts and sometimes I accept small mandates in order to increase the amount of savings I accumulate. Seriously, watching my savings grow has become addictive. It is sosatisfying and gratifying to see that we are getting closer to our goals that it becomes easy to say no to certain things and to prioritize our dreams instead of trying to impress the gallery.
I also use my excess income and savings to plan for the future. So I took out disability insurance and life insurance. These are things we sometimes overlook, but are important when you have children.
Living within your means
One of the biggest mistakes that keeps us from achieving our goals is living beyond our means. Personal story. I live in a super 3 1/2 in Outremont. I have lived in this accommodation since 2012 and during my years of celibacy without children, this accommodation was perfect. When my daughter arrived, I decided to keep it for budget reasons, but also because I love the neighborhood. Last year, I started to find it too small and I dreamed of a big apartment with a bath for my daughter (we just have a shower). I was beginning to be unhappy in this apartment. So I decided to donate all my furniture and buy new ones and redecorate completely. Waste of money ! After a few months, back to square one, I still had the blues and wanted to move. I started looking for apartments in my area and they were overpriced. My good friend Nadia then made me realize that I should focus on my goals instead of my feelings. I could well move and pay double the price for accommodation,but I could also decide to save that difference for my down payment and buy the house of my dreams. So I analyzed the pros and cons, and realized that for now my 3 1/2 was all we needed and I enthusiastically started saving to offer us our home within a year or two. And since then, I no longer complain. I don't care what people think. I am grateful for everything I have and I work hard to realize and achieve my dreams.
I also stopped uncontrolled shopping. I asked a stylist friend to make me a wardrobe of essentials and I'm content with having a few pieces, but versatile enough, to be able to create timeless looks.
Before I buy something, I always ask myself: will it help me achieve my goal of financial independence? If not, I give up most of the time. When it comes to stuff for me, this technique works pretty well. I have to refine this art for things that concern my daughter, I can't deny her anything or almost!
To conclude
I know this article is long, but as a single mother, I had to make choices and take charge of my life for the benefit of my daughter. Its not always easy. I work a lot and I have little time for myself. I still try to have a balance and spoil myself from time to time. It is certain that sometimes I exceed the limits of my budget, but most often I try to remedy it by swingingsomewhere else. It takes willpower, it takes courage, but it also takes an entourage that supports you, encourages you and understands what you are going through and the efforts you are making to regain control of your life and your finances. It mostly takes honesty and being true to yourself.
And one thing to finish, it's important to teach our children about financial education. They are not afraid to talk about money, finance and savings. It is even very formative for children to be introduced to these questions at a very young age.
Reading suggestions
- The 5 Second Rule by Mel Robins
- Miracle Morning, treat yourself to extra life! by Hal Elrod
- Rich Dad, Poor Dad by Robert T. Kiyosaki
