One of the most important yet oft-neglected life skills is learning how to properly manage your money. The good news is that it’s never too late to start developing this valuable skill. Here are five money management tips that have stood the test of time, and will help you keep your finances in good shape.

 

Know your money. Take the reins on your financial situation by always knowing how much money you have, where it is, and why it's been put there. You should also be maintaining a budget and tracking your spending regularly so that you have a complete picture of the state of your finances at all times. Don’t rely on anyone else, whether it is your husband, boyfriend or a financial advisor to have all the answers for you. Educate yourself on investment basics so that you remain the person who is most familiar with the state of your finances at all times.

Keep track of important paperwork. Store documents such as your signed will, insurance policies, income tax returns, as well as other legal documents like your birth certificate, passport, and social insurance card all together, such as in a fire-proof safety box at home. This will help to organize your most vital paperwork in one spot so you’ll always know where to go when you need to review certain aspects of your personal finances or require the appropriate documentation.

Control your emotional spending. Take note of your shopping habits so that you’re aware of when you are susceptible to spending money to make yourself feel better. The next time you recognize yourself in this situation, avoid the mall or surfing around on your favourite online shopping sites and instead think of other ways to put yourself in a good mood such as going for a walk, listening to your favourite music or taking a long, warm bath.

Get properly insured. Purchasing life insurance should be a top financial priority to all Canadians as soon as they start working. Disability insurance is also an equally important type of insurance to have. Start doing some research by checking out the various options available through banks and other financial institutions or set up a meeting with a knowledgeable insurance agent, and before making any purchases, shop around to compare policies.

Talk about money together. If you’re in a committed relationship, make sure you and your partner are on the same page when it comes to finances. Decide together what your short- and long-term goals are. For example, you may be thinking about buying a house within the next two years whereas your partner might not be thinking about becoming a homeowner for another five years. The key to avoiding turning money into a divisive issue is to be able to have open and honest discussions in order to understand one another’s values about money, so make it a habit to talk regularly about the state of your finances.