A new year is a good time to review our financial strategies. We want to take some time to check our current budget and make any necessary adjustments to our saving and spending habits.
We should ask ourselves a few questions, such as –
Did we overspend on holiday gifts?
Did we entertain more than we expected?
Did we splurge on that much-needed vacation this year?
It’s a good idea to revisit your balance sheet to see where you stand. You’ll be surprised at how small changes can make a big difference!
When filing a bankruptcy or consumer proposal you are required to complete two financial counselling sessions. Our experienced counsellor can assist you with budgeting tips, setting financial goals for the future such as planning that much needed holiday or a future home purchase. They can also provide advice on rebuilding your credit rating.
Review – Assess – Plan
The first step towards making positive financial change is to do a full review of your finances thoroughly. Make a list of your monthly expenditures, noting the big and small disbursements. You want to include a category for miscellaneous items like your morning stop at the local coffee shop or your afternoon smoothie. Once you have recorded your spending, you can see where you stand in relation to your income. Now that you have reviewed your budget, ask yourself:
Are you meeting your needs?
Could you be saving more?
Are there areas you could improve?
Set goals based on your budget review and create a plan to act on them.
The second step is to be sure you can manage your monthly payments if you have a lot of debt, which helps keep your credit score intact. If you are only paying the interest, you end up paying much more than you originally borrowed without paying down your principal. Consider changing your daily spending habits to free some cash for debt reduction. A little belt-tightening now can help you out in the long run. Lower credit payments and a better credit score will be your best reward.
Finally, once you have your debt under control and a healthy budget in place, it’s essential to establish an emergency rainy-day fund. This money can help ease unexpected expenses such as a new furnace or car repairs. A great way to accomplish this goal is to set up automatic transfers, and before long, you won’t even notice the money is gone from your account.
Another suggestion for those fortunate enough to have annual pay increases is to allot the difference to a savings account earmarked for urgent needs. You honestly won’t notice the significant contribution you are making to your financial security.
Of course, if you find it challenging or overwhelming to go through your finances on your own, the professionals at D. Thode & Associates would be happy to help you prepare a personalized budget that is realistic and geared toward reaching your goals.