January Budget Blues

It’s the start of another New Year! A time to reflect on the past, make plans for the future and renew our resolutions to become debt free. While the holidays may be nothing more than a pleasant memory, the arrival of January’s credit card bills can quickly turn these memories into buyer’s remorse.

It you are one of the thousands of Canadians who financed their holiday on credit, than the reality of your seasonal spending may cause a real debt disaster.

The good news is you are not alone…

With the average Canadian spending more than $1,800 on the winter holidays, many will be dealing with post-holiday sticker-shock when their January bills arrive. And if those bills are higher than expected (or budgeted for) many consumers will find themselves financially overwhelmed and suffering from the January Budget Blues.

Thankfully, there is a way to combat the January Budget Blues.

Instead of feeling down and overwhelmed by your holiday bills, take this as an opportunity to assess the damage, set some goals and create a real plan to pay off this debt.

Stop adding to the debt. Make a pledge to put your credit cards away and stop all discretionary spending until your holiday debts are paid in full.

Set goals. Set goals that are specific, attainable and relevant to your individual financial situation. Don’t just say you want to pay down debt. Be specific. For example, write down that “you want to pay down $1,000 of debt by February 15, 2014″. Be merciless in achieving this goal.

Create a budget. This is your monthly financial plan. Start by listing all sources of monthly income and all monthly expenses. Be relentless in the cuts to your discretionary and variable expenses – take your lunch to work, skip the dining out and make coffee at home – to free up the cash you need to reach your goals.

Learn from your mistakes. Are you still trying to pay down 2012’s holiday expenses, never mind 2013s? If so, now is the time to learn from your mistakes. Take a good look at your spending habits from last year and figure out how you can avoid making the same mistakes again.

Seek the help you need. Finally, be honest with yourself. Can you really manage your holiday debts on your own? If you are simply too overwhelmed by the January Budget Blues, seek professional help. A trained credit counsellor can help assess you budget and figure out the best debt management options for you.

The January Budget Blues don’t have to be a part of your annual financial plan. In fact, making small changes to your spending and saving habits can go a long way towards eliminating holiday debt all together. Take the time now to pay down your debt, and start a savings plan for a credit free 2014 holiday season.


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