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Well, it’s 2011 – are you looking forward to the year ahead? I recently spent some time in a snowstorm near Sarnia with little else to do but think, and spent much of it thinking about all the things I’d like to accomplish over the next year.
Joel Sandwith
Although there’s never a bad time to start taking better care of your money, January is a nice choice since you’ve just gotten the holidays behind you, and the calendar is fresh and clean.
What can you do this year to move towards a better financial future?
There is a lot of advice available about how to build a budget, how to set goals for yourself and your money, and how to plan for the future, but let’s concentrate on the small stuff first.
First, start tracking your spending. It may not be something you will want, or need to do for long, but for at least one month write down every penny you spend. You may be surprised at where some of your money goes! In fact, almost everyone who does this for one month ends of making significant changes to their budget, and spending patterns.
Second, try and spend only the money you actually have, if at all possible. What I mean by this is don’t use credit cards and try to avoid borrowing from your line of credit, if you have one. The best solution would be to work only with cash for a while – that’s difficult these days, but not impossible.
Third, ask yourself two questions every time you spend any money. Question number one is: am I happy with where this money is going? What this means is to remember that the money you are spending belongs to you. Are you certain that the best place for it is in someone else’s pocket? The second question is: how long did I have to work to pay for this? A good example is lunch – if you spend $10 on lunch, and make $15 per hour, you had to work 40 minutes to pay for that sandwich and coffee. Are you sure you couldn’t just bring a lunch from home?
Fourth, look at all your bills, and see if there is anything you can do to reduce them. Are you paying for channels you don’t watch? Does your cell phone plan give you more features than you actually use? When your car insurance comes up for renewal do you always shop around for the best rate for your needs?
Fifth, see if you can figure out how much the interest on your debt is costing you. Here’s an example: if you are paying 19.5% interest on a credit card, and have a balance of $5,000, you are paying $81.25 in interest on it every month. Go back to tip number three above – how long do you have to work to make $81.25 – after taxes?
Sixth – set a goal. You have 12 months – what can you accomplish? Can you become debt free, or at least get part way there? Can you start an emergency fund, setting money aside for things like car repairs or medical expenses? How can you save money every day to get to that goal?
The seventh tip is to not be afraid to seek out some help. If you have the flu, you make a doctor’s appointment, if your car won’t start you call CAA or your mechanic, and if your basement floods you call plumber. So, if you are struggling with debt, call someone who can help. The tips listed above are always good ideas – and all of them will help you. But it is possible, if you have debts, that paying them off in full simply can’t be done. If this is the case, or you think it may be, call us for a free evaluation – bankruptcy is not your only option. In fact, more and more folks each day are discovering consumer proposals as an alternative to bankruptcy, and we can help you learn more about all of these options.
Make this a better year – build a plan starting now, so that by this time next year you can look back on 2011 as being the year you started to control your money, instead of the other way around.
I recently joined Hoyes Michalos, and I work in our 
