The coronavirus pandemic has turned the world around for everyone. We now live in a time marked by social distancing protocols, rolling lock-downs, and increasing financial pressure.
Those hit by the downturn in the economy have also suffered from pay-cuts, lack of job security, and sometimes, unemployment. This is especially the case for workers in more “COVID-sensitive” industries like the hospitality sector and aviation.
You can spend all day telling your clients that they need to keep their books in better order, but what if you aren’t following your own advice? Even finance majors and accountants at the start of their career may know how to balance a budget, but sometimes they can neglect their own personal finances. It might have something to do with being under the pressure of maintaining other people’s financial wellness, but it’s difficult to give advice that you aren’t taking yourself. In fact, a professional with an online bachelor’s degree in accounting with bad credit and unpaid debts might not be hired by companies with minimum credit requirements. If you already have a good deal of knowledge on accounting and budgeting practices, treat yourself like one of your own clients.
In order for us to take control of our spending, it is important for us to be aware of when and why we spend. Only then can we make necessary changes and improve our spending habits.
What mood are you in when you spend money?
Generally speaking, when you spend money are you in a good mood or a bad mood? Do you spend money to cheer you up after a bad day or do you spend money in celebration of something great that just happened?
I recently read an interesting article on globeinvestor.com that talks about how the value of a dollar changes depending on what life stage you are in. For example, as a child, you would have cherished one dollar as if it was an entire fortune, but at different times in your life, you will likely value it differently. The main point of the article is to set up a strategy so that you are making the best use of your money throughout your life.
For people who struggle all their lives to make ends meet, the value of the dollar will likely be fairly consistent through all life stages, however, for those who have enough money to cover all the bills without a lot of stress, it appears that the value of a dollar becomes less meaningful especially when one is older. According to the article, “… it often becomes clear that the precious dollar of today is better spent than saved for the future, when it will be of much less personal value”.
It’s tax refund season again and it’s always nice to get some extra money back from the government. We got a refund this year because we both contributed to an RRSP. If we had not contributed to an RRSP, we would likely have had to pay taxes this year as our employers only take off the bare minimum required from our paychecks to cover taxes.
Getting a tax refund due to overpaying on taxes throughout the year is a bad thing. It means the government has owed you money all year long and rather than it being in your bank account, the government has benefited from it. One way to ensure that this doesn’t happen to you is to make sure your employer only takes off the minimum required taxes. Some people opt for the maximum taxes to be taken off in order to ensure a tax refund at the end of the year. I wouldn’t recommend this option unless you know that you are a horrible saver and this is the only way you can save.