Even though I am an amateur personal finance blogger I just did what I’m sure a lot of folks can relate to.
All week I refused to check my bank account to see the balance.
I also just did what I hope a growing amount of people can also relate to.
I finally did!
Personal finances are scary, confusing, isolating and often emotional. There is a cycle of denial-ignorance-financial misstep-denial that keeps people afraid of facing their personal finance reality.
You have to know what your situation is before you can do anything about it. You have to open your bills (read them carefully and pay them!). You have to check your credit card statements, especially the interest rates and minimum balance required. You have to check your loan status and interest rate. You have to check your bank account regularly.
Maybe you forgot about that shopping spree last week that ended up on your credit card, or that bill that was due last week, or the fact that you have a bill for $100 coming out tomorrow but you only have $89 in your account. Or you might be in a much better situation than you expect! It is always better to know than stay in the dark about your individual financial state.
Ways you can start to understand your financial situation
- Know the location and balance of all your bank accounts: chequing, savings, TFSAs, RRSPs, etc
- Know the location and balance of all of your credit card debt. Understand the interest rate and how it is calculated.
- Determine the balance and interest rate on all other debt, and don’t leave anything out! Mortgage, car loans, student loans, personal debts to family or friends, lines of credit, pay day advance loans. The list sadly can go on and on.
This gives you a snapshot of where you are right now.
If you have a full understanding of where you are today, you can make the second most important step, which is planning for the future!