Planning a big purchase? You may want to wait

Eyeing a big purchase in the next few months, thinking that a year-end bonus or raise next year will cover the costs? A new survey shows that you may want to reconsider your plans.big purchase

Consulting firm Aon Hewitt’s recent poll of Canadian employers show that the majority of companies plan to keep s fairly static in 2017- meaning that they don’t plan to give any major raises. And if they do, the rise in pay will be modest. The respondents widely expect that 2017 will present some challenges economically, and are tightening their purse strings to weather a potential storm.

Of the 347 companies polled:

  • The average increase to employee’s base pay is likely to increase 2.8 per cent, up only marginally from 2.6 per cent the year before.
  • Spending on variable pay (e.g. bonuses and incentives) remains unchanged from the year before at 15.4 per cent of the overall payroll.

“Responsible money management means spending within your means. With projected economic uncertainty likely through the next year, there is a new element to that concept. As costs of living increase (as they often do year over year) your pay may not keep pace. That means setting a serious budget based on your current income and sticking to it,” says Jeff Schwartz, executive director, Consolidated Credit Counseling Services of Canada.

“If you are already living paycheque to paycheque, you may want to retool your current budget to see if there are areas in which that you can cut back,” says Schwartz.

Save now, buy later

It’s time to turn the whole idea of credit on its ear. Commit to cash and place any non-essential big purchase on the back burner.

If there are purchases that you’ve been mulling over that go beyond your budget, save the money month to month and then make the big purchase in cash, rather than buying today and paying tomorrow.

Think twice about more debt

Maybe you are in the market for a new car or are considering taking on some home renovations.  You may want to reconsider before signing on the dotted line for more debt.  Economic uncertainty may mean that your pay is flat lining, but economic uncertainty is also the breeding ground for job loss.

Depending on what industry you work in, what your position is and a number of other factors, there are varying levels of vulnerability. Just to be on the safe side, defer taking out more debt until the economy (and your household finances) are on firmer ground.

Is there other compensation on the table?

Maybe your employer’s hands are tied in terms of giving you additional outright financial compensation, but maybe there are other options that could be of benefit to you. If you have a good relationship with your employer and are overdue for a raise, would your employer be open to letting you telecommute a day or two a week or work flexible hours?

It might help you save some money on your commute or reduce your child care costs, which might give your household budget a little boost.

Are your debts eating up much of your monthly income? Are you looking for ways to get your dollars to go further? You can start by reducing your debt. Call us at 1-888-294-3130 or take a look at our free online debt analysis.

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