Although resolutions to quit bad habits or acquire new skills are often associated with New Year’s, the end of summer can also be an excellent time to embrace positive change. Summer is all about ditching routine in favour of fun times, like eating special foods, spending lazy afternoons on the back deck and spending on extras. But when the temperatures start to pull back in fall, it is time to head indoors and get back to routine. If your summer has included a little extra indulgences monetarily and you are ready to get back on track, it’s time to get financially fit.
“The key to growing your savings and keeping your debts under control is to retain a consistent focus, no matter what the season. However, with the short summer months, it’s not hard to justify wavering from the budget,” says Jeff Schwartz, executive director, Consolidated Credit Counseling Services of Canada.
“If you feel like you’ve gotten off track with your saving and debt management, don’t feel discouraged. Acknowledge where you’ve deviated from your plan, and take steps to amend your saving and spending habits going forward,” says Schwartz.
Here are some steps to chart your course back towards becoming financially fit:
Revisit the budget
One of the basic rules of good budgeting is to revisit it often. The recommendation is generally a quarterly review, so with the change in season, this is a great time to take a look at where you are at in relation to where you’d like to be.
List all of your expenses against your income. Apart from any of the extra spending you did this summer, are there areas that don’t match up? Maybe you’ve overestimated in some areas, and underestimated in some as well. Tweak away until you’ve got a reasonable allocation for your income that addresses spending, saving and debt repayment.
If you are serious about becoming financially fit, it’s important that you commit to accuracy. The only way to really know where your money is going is to track it as you spend it. Keep paper trails for bills (even if you pay online or do automatic payments).
Change your attitude towards spending
Another major budget buster? Impulse shopping. Get in the habit of re-thinking each and every purchase that is not accounted for in your budget. Walk away and see if the urge passes. If not, try to find room in your spending allocation to cover it, but most definitely leave the credit cards in the wallet.
It’s not just enough to focus on paying down the debt that you have; you’ve got to commit to cash to avoid accumulating more debt.
Address the savings question
If you are focusing on paying down debt, you may tend to neglect the savings side of things. However, savings is an essential part of debt management. When emergency costs surface (and they will-when you least expect it), having a cash cushion means avoiding turning to debt.
Did your credit cards get overused this summer, and now your debts have snuck up on you? Don’t delay taking action against this growing debt load. Give one of our trained credit counsellors a call at or get started with our online debt analysis.