Personal Budgets in 2020

December 31, 2019 10:48 pm Published by Leave your thoughts

It’s the new year! a fresh start, a clean slate, and, sometimes, a heap of debt. With all the joy of the holiday season, it can be easy to spend too much.  With the combination of buying gifts, traveling, decorations, wrapping paper, and turkey, it can be easy to overspend. Now that its January, we may need to make a personal Budget for 2020.  Hopefully, these New Years debt tips help you set up some good budgeting habits that will last throughout the year.

 

Step 1: Make a budget and stick with it!

This is the first suggestion and it’s the most powerful.  Look at an “average” month’s income and then subtract your expenses:  utilities, rent, food, debts, and other expenses, plus a little extra for emergencies. Finally, look at the remainder – this is what you can use to focus on debt repayment.  If this is not a large enough to pay down your debt, then you need to increase your income or reduce your expenses.  But be realistic – too extreme of a debt repayment plan is sure to backfire and be demotivating. The Financial Consumer Agency of Canada has a great budgeting tool for free on their site.

Step 2: Stop buying things you can’t afford with credit

New spending habits take effort.  Challenge yourself to avoid credit.  Credit can be a helpful tool as it’s handy if you don’t have any cash on hand. But it also can lead you to impulse buy items you can’t afford. If you only use cash, you cannot get further into debt.

Step 3: Small things add up

Spending a small amount on something, once, isn’t a big deal. Spend a small amount on something, many times a day, every day, and things will start to add up. If you start to notice you are overspending, take a look at your daily activities to see how many of the “small purchases” you can cut out. Remember, having a $5 cup of coffee every day adds up to over $1800 a year!

And remember, if you need assistance with a debt repayment plan, we offer a free consultation if you are considering either a consumer proposal or personal bankruptcy.

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