It’s the middle of January and the Christmas bills should start rolling in. If your like most families you ended up spending a little more than you planned to over the holidays. I’m not going to start with the “You outta know better” guilt trip, instead I’d rather give you some help diagnosing and getting a handle on the situation before it gets out of control.
A surefire way to tell if are suffering from a holiday spending hangover is that you took your mailbox down and hid it in the basement or you “forgot” your online banking password so you can’t check your balance. Unfortunately for the not so obvious I have listed 3 signs that you may be suffering from a holiday spending hangover:
Do you have any money left at the end of the month?
If you have nothing or what is left after paying bills is dropping, you need to be saving more.
Do you only pay the minimum on your credit card?
Paying the minimum on a $3,000 balance with a 17.99 percent interest will take 37 years to pay off, with nearly $11,000 in interest!
Do you have an emergency fund?
You should have enough in the bank to cover three to six months of expenses – even more if you are worried about being laid off. I don’t want to oversimplify the process, but I like to start with the “A-B-C” approach:
Look at your spending habits and your debt to determine where the money goes. Once you’ve assessed your situation, you can start to better manage your cash-flow.
When you better understand your money habits, set specific financial goals, to pay down that debt, and to more effectively save your money. You should work on a budget as a family so everyone is involved and focused on the same goals.
When the plan is set, work on a number of options to minimize debt, including combining debt, refinancing, or replacing mortgage insurance for starters.
This is way to start on the road to recovery from a holiday spending hangover (no raw egg smoothies, unless you like them), it’s not easy and it won’t happen overnight, but with a plan and working together as a family it’s a much better alternative to ignoring the symptoms.
You can visit my website AndrewWBradley.ca for more information, financial calculators and free monthly budget spreadsheet that you can download. If you need more help you can always contact me for a free consultation and begin the process of taking control of your debt – and sleeping better at night.
Andrew W Bradley
Insurance Broker & Financial Services Advisor
direct: 613.286.6841 | office: 613.232.1432
2100 Thurston Dr Suite 13B Ottawa, On K1G 4K8