Top Tips to Stop Worrying About Money
It is December already; a time for friends & family, giving thanks, helping those less fortunate and a time to reflect upon the past year and think about things you would like to change for 2008. If you have done some or all of the following Top Tips to stop worrying about money, you probably won’t have finances at the top of your list.
Focus on the long term. If volatile markets cause you to lose sleep, you may be taking more risk with your portfolio than you should.
Don’t watch stock prices daily. If your portfolio is made up of good, solid companies and not a ‘sure-thing’ gold stock your neighbour’s friend recommended than the normal ups and downs of the market should not concern you.
Hold some dividend paying stocks. It is nice getting a cheque even when the markets are going down, plus, you will probably save some tax money.
Pay down your mortgage or other debt. If the markets are making you nervous, double up on your mortgage payment and save that way.
Make your RRSP contribution. It is a nice feeling not waiting for the end of February deadline, plus your money has been working for you all this time.
Don’t panic and don’t sell in a panic. No matter how bad things seem, it is important to remain calm. You can’t change or have an effect on the markets. The stock market is often driven by fear or greed and factors that happen in countries other than Canada.
Take a comprehensive look at your financial plan. What changes have happened since one year ago; change of job, birth of a child, death of a loved one, a parent needing assisted living, a raise. Are you on track for your short and long term goals; have they changed? Are you planning on a large purchase; new car, home renovations, travel & holiday plans
Stay positive. You have been conscientious and worked hard to accomplish everything you have. Enjoy it.
Plan—plan to pay down debt, plan for the transition to retirement, plan for the unknown with health insurance, plan for your estate—it doesn’t mean you won’t be around for much longer
You have one month to implement a process to receive $2000. tax free from a pension if you aren’t already receiving at least that amount.
Economic factors can cause uncertainty and bad conditions for selling a portion of your portfolio. The sub prime issues and the lack of liquidity are an example for 2007; consider postponing a large expense or borrowing the funds instead of selling low. Use the equity in your home and save money in the long run.
Focus on what the money is for – such as a child’s education or the comfort of your family, instead of focusing solely on the markets and making money. An advisor can provide guidance and recommendation so that you can worry less and enjoy life more.