subject: Making Good Financial Choices At The End Of The Year [print this page] The end of the year puts a big strain even on the best of budgets. According to a BMO poll, the average Canadian family will spend approximately $1,400 this year on the winter holidays. Roughly one in four families will rely on credit. Still, with debt loads still high enough that the average family owes $1.54 for every dollar they earn, can Canada really afford another expensive holiday season this year?
To avoid financial hardship at the beginning of next year, you need to be smart about how you budget and spend your money now. The following tips can help you stay on top of your finances through the end of the year:
1. Assess your household budget so you can adjust for any seasonal changes in your income. You may have reduced hours at work or additional seasonal income that needs to be accounted for in your budget.
2. Develop a holiday spending budget that goes into detail on what you plan to do so you can get an accurate total of all of your holiday costs. If possible, you want to pay for everything on your list with your available cash flow to avoid financial hardship.
3. Avoid using credit in an attempt to make the holidays more spectacular and dont depend on credit to cover all of the extra holiday costs. Remember, if you cant afford to buy something now, you probably wont have the budget to cover the increased credit card bills later.
4. Spread out holiday shopping over the next few months so you dont have to cover the entire cost of the holidays in the last month of the year. By spreading the cost out, you can avoid using credit.
5. Find ways to save on the holidays, such as reusing old decorations and making big holiday meals potluck so you can reduce your out-of-pocket costs.
6. If youre buying gifts online, make your purchases as early as possible to avoid paying more for express shipping charges. Ground shipping options are usually available for free from most major online retailers.
7. Avoid making impulse purchases when you shop for gifts. Always go shopping with a list to help you stay on budget.
8. Make any travel reservations as early as possible and bundle the airfare and your accommodations online to reduce travel costs.
9. Dont depend on a holiday bonus or end of year bonus to get by during the holidays. With the economy still weak and extremely uncertain, your bonus may be less than you expect or entirely nonexistent.
Make sure to keep track of your finances closely throughout the end of the year. Keep track of credit card purchases and use a debt repayment calculator to help you determine how extra charges will increase your monthly payments. If you get into trouble, dont wait to seek help. Many debt relief options are only available in limited circumstances, so procrastinating and allowing things to get worse may be limiting the options you have to get back on the right financial path.
by: Claudia Humphrey
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