(TORONTO, ON) – In his economic update yesterday, Finance Minister Joe Oliver announced that Canada’s budget would see a surplus of $1.9 billion in 2015. This number is lower than expected, with experts blaming low oil prices and government tax cuts for the shortcoming.
But it’s a surplus nonetheless. And with November being Financial Literacy Month in Canada, some think it could serve as inspiration for Canadian families to balance their own books.
“Living beyond our means is a one-way street to out-of-control debt,” says Jeff Schwartz, executive director of Consolidated Credit. “If you’re spending more than you earn, that means you’re leaning on credit and the interest charges that come with it.”
We do seem to be overspending. Canadian families owe an average of $20,759 in debt, without factoring in mortgages. Consolidated Credit recently reached out to Canadian consumers to find more, and learned the following:
- 35% say their largest source of consumer debt was impulsive shopping
- 28% say they hit financial rock-bottom when they were unable to pay rent or make mortgage payments
- 13% had their credit card declined unexpectedly
- 71% said the most valuable lesson they learned was to live within their means
“You shouldn’t have to hit rock-bottom before you decide to make a change,” says Schwartz. “Financial Literacy Month is a great time to balance your books at home and start making positive steps toward financial freedom.”
With that in mind, Consolidated Credit has come up with some tips on how to tighten household budgets to make the most of your income:
- Find out where you stand – You need to know if you are indeed spending more than you are earning. Gather three months’ worth of pay stubs, credit card bills, bank statements, and utility bills. Stack up the numbers and see if you are at a spending deficit or surplus. Our free budgeting app can help with this.
- Embrace the kitchen – Statistics show that Canadians spend 28 per cent of their food budgets in restaurants. Eating at home will mean big savings, and brown-bagging your lunch will help eliminate daily costs that add up over the month. If time is an issue, consider preparing and freezing meals on the weekend.
- Rethink home electronics and entertainment – Technology has come a long way over the years, and so have the bills. The CRTC says Canadian families spend an average of $185 per month on communications. If you’re spending extra on new tech, maybe it’s time to get rid of old tech that you no longer use. Perhaps you could ditch the landline or huge cable package if you’ve recently upped your cell phone and internet packages.
- Attack your debts – Try to make more than the monthly minimum payments on your credit card debts. Paying the minimum will prolong your pay period and add interest to the cost of your purchase (try using our debt calculator and see for yourself). You can start by attacking your credit card with the highest interest rate.
- Shrink your utility bill – Whether it’s wearing a sweater in the winter, taking shorter showers, or running your dryer in non-peak electricity periods, there is always more you can do when reducing your energy bills. Look into government subsidies that reward energy-efficient homes.
- Seek help – If you feel like you’ve tried everything but you still can’t get your budget under control, you might want to seek professional advice from a financial advisor or a non-profit credit counselling service.
“Budgets shouldn’t be seen as restrictive,” adds Schwartz. “They can be liberating – they put you in control of your finances so you’ll never have to worry about hitting rock-bottom.”
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:
Jacob MacDonald, Public Relations Coordinator, Consolidated Credit Counseling Services of Canada, Inc., T: 416-915-7283 ext.1041, C: 647-390-5253, F: 416-915-5200, E: [email protected]