January is a great time to examine your finances and set new targets for the year, but making progress on your goals can be challenging if you have to deal with a holiday debt hangover. Don’t let your expenses get out of hand.
Own what you owe
Fixing any problem begins with understanding it. People can be so afraid of their debt that they refuse to open their bills. But late or ignored debt payments only make matters worse and can have a long-term impact on your credit rating if left unchecked. Take the first step and gain clarity by assessing the damage to know exactly how much you owe and to whom. Then set up a schedule for paying back the debt. Try to repay significantly more than the prescribed minimum so that you chip away at the principal.
Put your spending into hibernation
Now is the time to give your cards and yourself a rest – don’t add to the debt. Reduce your entertainment costs, avoid eating out and trim any extras on your internet, phone and/or cable bill. Use a debit card or cash to pay for necessities like food. And take steps to avoid spending temptations. That may mean going for a walk outside instead of through the mall or keeping your credit card at home. A lot of our life is now online, so you may also want to take a digital hiatus to control any shopping from your couch.
Focus on goals, not resolutions
Resolutions tend to be all or nothing affairs. They usually fail because we often don’t map the necessary steps to achieve the goal we’re striving for To successfully achieve your goals, you have to have a clear intent, a concrete plan, and a willingness to take action. Start by building a budget and a timeline for each goal. For debt, set a reasonable deadline for paying it off. Remember that overt time, putting aside even small amounts in regular increments can grow to substantial savings. Just think – if you can save $50 a month for a year, you’ll have $600 to spend during the next holiday season.
You owe it to yourself
Being prepared and having a plan to bring your aspirations to fruition is one of the best ways to make a positive and meaningful change in your life. For help fine-tuning your 2022 wealth plan to get results and move closer to realizing your goals, contact one of our Senior Wealth Advisors today.
This information has been prepared by Raymer Financial who is an Investment Advisor for iA Private Wealth Inc. and does not necessarily reflect the opinion of iA Private Wealth. The information contained in this document comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. The Investment Advisor can open accounts only in the provinces in which they are registered.
iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.