Managing my financial stress

During your studies, going into debt is often inevitable. Bills accumulate faster than income: tuition fees, living expenses, or unforeseen necessities (computer, etc.).  And if temptation comes into play, you take out your credit card or use a line of credit.

It’s easy to use credit. But you have to distinguish between purchases you really need and those driven by your wants. If you don’t stick to your budget, you can go deeper into the red. Paying off your debts then becomes a major source of stress and a burden on your life.

Financial stress can be detrimental to your mental health: loss of sleep, poor compensation strategies (drinking, smoking, medication, “comfort” food). Money worries can also affect your mood (more irritable or unhappy) or have a paralyzing effect: you procrastinate in the belief that your problems will somehow disappear as if by magic.

Generally, good debts are justified because you will obtain some profit from your investment. This category includes loans for:

• tuition fees
• starting up your professional practice
• buying a home
• savings (on certain conditions)

All other debts are considered bad debts, and these are the ones that are the easiest to contract! Your behaviour and your spending habits are factors that can push you deeper into debt and drive you to despair.

The first thing is to avoid impulse purchases. For example, try to understand why you’re spending:

• Is your purchase really essential?
• Will you still want it tomorrow?
• What is motivating you to make the purchase? Your friends, advertising, etc.?

The answers to these questions are key indicators: your ability to manage your finances responsibly depends on them. To adopt and maintain healthy financial habits, here are some basic exercises:

• Make a budget and stick to it.
• Set aside amounts for your special projects.
• Pay cash as much as possible (leave your credit cards at home).
• Limit your visits to online shopping sites or to the shopping centre.
• Try to reduce your “small” expenses (coffee shops, restaurants, etc.).
• Ask you financial advisor for help!