With the holiday season behind us and the credit card bills rolling in, your wallet may be experiencing a bit of a financial pinch right now. Whether it was the purchase of expensive gifts, festive holiday sweaters, or hosting fancy family dinners, you likely went a little over budget during the holidays. Not to fear, by adopting easy financial habits, you can reduce your risk of a financial hangover and set yourself up to avoid another one next year.
Can establishing a budget (or recommitting to one) help you from overspending?
The start of a new year is the perfect time to hit the reset button on your monthly spending – set up a budget. Creating a budget is a simple way to help you get a clearer picture of where your money is going so that you don’t spend outside your means. New to budgeting? Not a problem! Start with a simple budgeting worksheet to help you keep track of your monthly income and expenses. If you are using a pre-existing budget, consider revisiting it. Review your budget against your bank account activity from last year to see how closely you stuck to your financial plan. If you failed to stick to the plan, don’t worry! Customize your 2022 budget to reflect your most up-to-date expenses and annual saving goals to help you avoid putting any more stress on your wallet. If you’re not sure where to start, visit your local credit union and work with a financial advisor to create a personalized financial plan.
What are the benefits of setting financial goals?
Setting annual financial goals is an excellent way to help you recover from the holidays and improve your overall financial and mental wellbeing. Are you hoping to purchase your next car or take a long-overdue vacation this year? Identifying your short-term and long-term financial goals can help you determine what you want your money to do, so that you actively work to spend less and save more. Challenge yourself to the “52-week money challenge” to start building on your savings today so you can get closer to reaching your financial goals. Need help to stay motivated? Get your friends and family involved in the challenge to help you all get on the right financial track in 2022. Now, that’s a win-win!
Can changing your payment method help curb your spending?
From the daily trips to your go-to coffee shop to high-priced gift shopping, for many of us, our relationship with our credit cards has become love at first swipe. This often leaves us walking into the new year with unforeseen new debt. In 2022, try making more of your purchases with a debit card instead of your credit card. Visually seeing the money come out of your bank account as you spend, will help you think twice before each purchase, so you stay focused on paying off your credit card bills without taking on more debt. If you choose to continue to use your credit card to take advantage of specific benefits this year, remember to pay your bill off in full each month. Visit your local credit union to learn about the affordable credit card options they have available and why they might be a good fit for you.
When should you start planning for the next holiday season?
Imagine when the holidays roll in next year, you were financially prepared! Early planning can help set you up to have a debt-free holiday season. January and February are the perfect time for Canadians to take stock of their previous holiday spending and even start planning for the next one. Setting aside money each month into a dedicated “holiday” savings account can help you start saving now, so that your only worries later are what to pay for and not how to afford it. Visit your local credit union to discuss opening your own holiday savings account, so you can start putting a little money away today to make next year’s holiday season truly merry and bright.
Take charge of your financial future today…become a credit union member
Credit unions are a great financial option to help you set realistic budgeting goals and keep your finances in check all year round. Not yet a credit union member? Find your nearest credit union, click here.