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3 Ways to Conquer Consumer Debt After the Holidays

Did your consumer debt balances creep higher over the holidays? As those holiday bills start to roll in, you might feel the urge to scream, cry or shout obscenities at your mailbox. The best approach, though, is to keep calm and make a plan.

3 financial trouble areas and how to conquer them

According to a pre-holiday survey, Canadians planned to spend even more in 2018
on holiday shopping, travel and entertainment than they spent in previous years. If
you went a little overboard, now is the time to figure out which financial problem
areas you want to tackle.

  1. Overspending – Over the holidays, it’s easy to get caught making impulse
    purchases. However, if you also find yourself doing this often throughout the
    year, you might want to work on curbing those tendencies. Try these tips:

    • Make a list – and stick to it each time you shop.
    • Shop with cash. It’s harder to part with cash and you’ll be less likely to splurge.
    • Avoid shopping at places that trigger you to spend more than you want.
  2. Credit card debt – One-click checkout, tap and pay, and those big purchases
    that your income won’t quite cover — all these things can add up to serious
    credit card debt. And, since interest rates have risen five times since 2017
    and are expected to rise as many as three more times in 2019, those
    purchases are going to cost you even more. Here’s what you can do to stop
    adding to credit card balances and start paying them off:

    • Put your credit cards on ice. That means, don’t take them with you
      when you shop, and re-think those online checkout purchases unless you
      have the cash to back it up.
    • Build up your emergency fund so you won’t have to turn to credit cards
      to fund those unexpected expenses. Start small and add to your fund
      until you have three to six months’ worth of income banked.
    • Throw all extra money at your highest interest debt while paying the
      minimum payments on your other cards. This is the debt avalanche method and it works wonders when you want to reduce debt fast.
  3. Budgeting – Without a budget, you’re left to remember all those bills and
    debits each month. And let’s face it – you’re probably busy enough without
    extra things to remember! That’s the beauty of having a budget that can
    predict your upcoming expenses and allow you to plan your spending
    accordingly. Here’s what you need to start budgeting like a pro:

    • A good budgeting uses your banking information to break
      down your spending categories and offer suggestions. If you’re
      uncomfortable with an app accessing your personal data, opt for Wally.
      It allows you to take pics of receipts and categorize all your bills and
    • A good ol’ worksheet – Print off this handy budget worksheet, laminate
      it or stick it to the fridge. Use it to see exactly where your money goes
      each month and what you need to plan for.
    • Goal calculator – A goal without a plan is just a wish! Ditch the
      resolutions and set some SMART financial goals that you can stick to all
      year long. Use this financial goal calculator to get started and don’t
      forget, goals change. Adjust them as needed.


Need more motivation?

Skip the fads and stick with what works. The slow and steady approach is best
when it comes to forming better financial habits and making changes to your
routine. In addition, some inspirational finance bloggers can help keep you on
track because they’ve been in your shoes and they dug their way out. Check out
these resources:

Kerry Taylor – Financial expert whose website Squawkfox offers frugal, money-
saving tips, budget worksheets and how-to strategies.

Christine Drummond – Finance blogger at The Wallet Diet who squashed 35k in
student debt and offers practical lifestyle advice for anyone wanting to save and
get out of debt.

Financial Consumer Agency of Canada (FCAC) offers tons of resources to help you
at all stages of your life whether you’re just starting out or planning to retire.
Check out Your Financial Toolkit.

Are you ready to make decreasing your consumer debt a priority this year?
Connect with us on Twitter for more tips and debt relief options.
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