CALGARY, Jan. 27, 2014 /CNW/ - It is January again, a month many Albertans are too familiar with when it comes to being deluged with post-holiday bills. According to a poll on November 25 2013, Albertans were expected to spend more during the 2013 holidays than they should. About 65% said they will overspend on gifts.
With the spending euphoria and over-indulgence behind us, the harsh reality of paying debts in January quickly kicks in. If you are finding yourself in a financial distress position as a result of the holiday season, money mentors suggest that you take advantage of resources and avenues that can help you to mitigate or deal with your finances head on.
There are countless articles and information centred on this topic online. You can also seek FREE credit counselling and financial assessment from an accredited not-for-profit organization. To avoid some of the most common side-effects of financial woes, money mentors advise Albertans to:
Get Organized - Have a clear picture of where you currently stand financially. Take a look at your income, investment, insurance, assets and debt. If you do not know your current financial position, it will be difficult to achieve your financial objective.
Set financial goals - This helps you focus on what you wish to accomplish in 2014. Perhaps you hope to pay down debts, or maybe you are aiming to start an emergency fund or start saving. Prioritize these goals. Realistically, you may not be able to simultaneously work on all your resolutions, so work in order of importance. And remember, goals should be SMART: specific, measurable, achievable, realistic, and time specific.
Pay down your debt - Stop using your credit card unless you know you can pay it off fully before the end of the billing cycle. You can also talk to your bank about reducing your interest rate. Always try to find an area to cut back on in your budget so that you can pay off your debt or build your savings more quickly. Do you have items that you no longer need? Try a garage sale, or one of the many available websites online on which you can sell what you are no longer using. This approach can help generate some extra money to pay off debt.
Create a budget - A good budget helps you stay in control of your money. If you are unsure of where to start, begin by keeping track of all your incoming and outgoing funds. Create spending categories such as food, entertainment, credit card payments and rent. You may want to cut back on or even eliminate certain purchases if your debt exceeds more than 40% of your income.
Start saving - Start saving for your irregular expenses, such as an emergency or retirement fund, as soon as you can. A pay increase at work or a tax refund can be opportunities to contribute to these funds. You may also need to cut back on some of your expenses. Areas you may be able to reduce your bills include your cell phone payment, cable, unnecessary credit card interest, and eating out. Attempt to set aside one day each week where you do not spend any money, and instead put that money into a savings account.
Remember, it takes a lot of self-discipline, time management, dedication, support, and reliable tools or resources for you to reach a comfortable financial position. Work hard and commit to your goals, and you will achieve financial stability in 2014 and beyond.
Money Mentors is the only Alberta-based, not-for-profit credit counselling agency. Through a number of services, we help families and individuals recover from financial crisis and move forward. From credit counselling and money coaching to retirement planning and community financial literacy, we are creating a healthier financial future for the entire province.
Image with caption: "It is January again, a month many Albertans are too familiar with when it comes to being deluged with post-holiday bills. To avoid some of the most common side-effects of financial woes, money mentors advise Albertans to tackle their debts head on. (CNW Group/Money Mentors)". Image available at: http://photos.newswire.ca/images/download/20140127_C5078_PHOTO_EN_35833.jpg
SOURCE: Money Mentors
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