How to do more with less in 2012

Toronto ON – A wake-up call for Canadians came when the Canadian Taxpayers Federation analyzed how short pay cheques will be in 2012 compared with 2011. Employment insurance premiums paid by employees will increase by $53 bringing the total payroll taxes to $3,147 or $142 more than 2011. Couple this increase with the recent Bank of Canada report saying the household debt-to-income ratio is now at an unprecedented 152.8 per cent may mean 2012 will bring financial ruin for any Canadians living beyond their means.

“If you received a year-end bonus or a gift of cash in the past it may have been treated like found money and deposited into a savings account but this year we are seeing more Canadians using the money to pay down their debt,” says Jeffrey Schwartz, executive director, Consolidated Credit Counseling Services of Canada, Inc. “Now that pay cheques are being reduced Canadians should look no further than their own mailboxes to see how much they owe and include savings and debt as expenses in their 2012 budgets.”

Traditional household budgets have leftover money put towards saving and/or paying down debt. “Today, once expenses are subtracted from income, the objective is to have a zero bottom line. Our credit counsellors are advising Canadians to adjust their attitudes towards spending 2012 and include savings and paying down debt as expenses in their household budgets,” continues Schwartz. If, at first brush, there are funds remaining it should be allocated to paying down debt, especially the one with the highest interest rate, in order to achieve a zero bottom line.

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