Money

Steps for avoiding or getting out of Holiday debt

By Thomas Johnson, For Interlake Publishing

Thomas Johnson is a Financial Advisor with Cascade Financial Group - ThomasJohnsonMB@outlook.com. (File photo)

Thomas Johnson is a Financial Advisor with Cascade Financial Group - ThomasJohnsonMB@outlook.com. (File photo)

Are you afraid to look at your credit card statement after the holiday season? You’re not alone.

That bill could be the reason why so many Manitobans find themselves making similar resolutions for the New Year, getting our personal finances under control.

Whether your goal is to save more, spend less or pay down debt, here are few tips to help make your resolution stick.

• Track your spending: Try keeping an expense journal for just one month. Record each dollar you spend and what you spent it on, then tally up the totals at the end of the month. Most people are surprised to find where they’re overspending. This technique can then help you design a realistic budget or find areas to cut back on. As a bonus tip, if you don’t want to keep a paper journal around, there are a number of apps that will track your spending automatically.

• Develop a debt repayment strategy: Do you feel like you’re paying debts haphazardly? Or that your balances never seem to go down? Developing a debt repayment strategy will ensure you’re reducing debt optimally and give you a timeframe for being debt free. If you’re looking to minimize interest costs, direct extra funds to the most expensive (after-tax) debts first. If you’re looking to improve your cash flow, paying off smaller debts first will give you more wiggle room each month.

• Make saving a habit: Most of us have the attitude of saving whatever is left over after the bills are paid. Unfortunately, this tactic rarely leads to savings success. Instead, make savings automatic. Transfer an amount, even a tiny amount, every paycheck directly to your savings plan first. Start small and gradually increase as your comfort level grows. You’ll be surprised how much you can set aside by paying yourself first.

Try these tips out and you could be making 2017 the best year your finances have ever had. I hope you and your families had a Happy Holiday Season and a very prosperous New Year!

- Thomas Johnson is a Financial Advisor with Cascade Financial Group - ThomasJohnsonMB@outlook.com.



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