Your household budget might need some sprucing up
(TORONTO, ON) – The springtime optimism is palpable. Things have been so cold and miserable this winter, that even the slightest rise in temperature is enough to make Canadians fire up their barbecues, sit on chilly patios, and venture out into the great melting outdoors.
Tomorrow is the first official day of spring, and many rejuvenated Canadians will mark the occasion by tossing out junk and giving their homes a good cleaning. But they might not want to stop there – Consolidated Credit Counseling Services of Canada is encouraging everyone to spring clean your finances too.
“Financial plans are meant to be dynamic and they need to change as your income and spending change,” says Jeff Schwartz, executive director of Consolidated Credit. “When people treat their budget like a time capsule, the results are going to be obsolete.”
Debt statistics routinely suggest that Canadians might want to consider dusting off their financial plans and rethink their priorities. This week, credit bureau TransUnion released the latest in a recent trend of scary debt numbers. As of the fourth quarter of 2014, Canadians owed an average of:
- $21,428 in non-mortgage debt (+2.3% from Q4 2013)
- $30,554 in lines of credit (+4.4% from Q4 2013)
- $22,187 in installment loans (+2.4% from Q4 2013)
- $3,659 in credit card debt (-2% from Q4 2013)
Schwartz worries that low interest rates and increasing net wealth might be encouraging Canadians to spend beyond their means.
“It’s giving Canadians a false sense of spending power,” comments Schwartz. “Your house might be worth a lot, but unless you sell it today and by a cabin in the woods, you can’t really think of it as a liquid resource.”
Just as you might dust off cobwebs and paint your kitchen a new colour this weekend, Schwartz recommends you give the same attention to your financial plan and household budget. Renewing your priorities will help you steer away from debt and move toward financial fitness.
Consolidated Credit offers the following suggestions for spring-cleaning your financial house:
Measure success – When re-evaluating your current finances, ask yourself “is this where I wanted to be compared to last year?” If you had a financial plan in place and it hasn’t helped you achieve the goals that you set out for yourself, then there must be some flaws. Zero in and find the exact causes.
Fix the leaks – Why hasn’t your budget worked out? Was it unrealistic? Have you been slipping and making impulse purchases that you cannot afford? Knowing your weaknesses will empower you to build a financial strategy that you can actually carry out.
Redefine your goals – There’s a chance that your priorities have changed over the last several months. Your budget should reflect that. Your visions of a tropical vacation might need to bend in favour of replacing your car that is on its last legs after a tough winter.
Stop fattening up your creditors – If you’re making minimum monthly payments on high-interest credit cards, the only person you’re helping is your creditor. Our credit card debt calculator shows how much less you’ll pay and how quick your repayment will be if you add even a small extra amount to your monthly payments.
Seek help if you need it – If you’ve really put some elbow grease into your budget and still can’t seem to make things any better, reach out to a non-profit credit counsellor or a financial planner. The sooner you seek professional help, the sooner you can get back on track.
About Consolidated Credit Counseling Services of Canada, Inc.:
Consolidated Credit Counseling Services of Canada is a national non-profit credit counselling organization that teaches consumers about personal finance.
For more information or to request an interview with Jeffrey Schwartz, please contact: