Christmas is a Time to Focus on Family

Christmas quickly became a time of frantic shopping, overspending, and thousands of dollars in credit card debt, but the pandemic changed things for many people.

Without the ability to spend time with loved ones over the holidays over the last few years, we’ve all learned how precious life can be.

This year, why not make Christmas about focusing on your family rather than spending money?

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How to Stay Motivated when Getting out of Debt

Starting a plan to get out of debt and keeping that plan are often two different things. It’s a lot like starting a diet when the New Year starts. You start off good, but then a week or two into it, you quickly fizzle and go back to your old habits.

So how do you stop this from happening when you’re trying to get out of debt?

Here are many ways to stay motivated to get out of debt.

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How to Manage Debt with Inflation on the Rise

Debt Management with Inflation

You’ve likely felt the effects of inflation already. Your grocery and gas bill probably felt it first. Suddenly it costs a lot more to feed the family or fill your gas tank, but these are things we need so we have to adjust elsewhere, right?

One area many people struggle is managing debt during inflation. If your wages don’t keep pace with inflation (most don’t), then keeping up with your debts may feel impossible.

Here are a few ways to help you manage debt with inflation rising.

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Warning Signs you May Have too Much Debt

Warning Signs of Debt

How much debt is too much? It can feel impossible to tell, especially since any debt can feel burdensome. But there are a few ways to tell that you have too much debt and that it’s time to do something about it.

Before you use a credit card or take out a loan, it’s important to determine if you can afford the payment. If it will put you over the edge, it’s too much. Here are some other ways to tell if you have too much debt.

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How Social Media Affects our Spending

Social Media Increases Debt

Social media is a way of life for most of us, but did you know it could affect your spending? You may not even realize the direct connection, but we’ll show you ways that you might be spending more than you intended all because of your Instagram or Facebook feeds.

Comparing Yourself

How often do you watch someone’s feed and think poorly of yourself? Maybe they have something you don’t, or you want to be just like them. What do you do?

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Drowning in Debt Is the New Canadian Norm

Drowning in Debt

Debt used to be for the ‘deadbeats’ or people who didn’t care about their finances. Today, though, it’s the new norm.

Why?

Mostly because we live in a world of instant gratification. Millennials, and younger generations especially, want everything now. Technology, the internet, and the advancement of most services today are to blame but that doesn’t make it okay.

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How Reducing Interest Rates Reduces Debt Faster

Pay Down Debt

Did you know that much of your debt consists of interest? This is especially true if you’ve carried balances for a long time.

For example, if you have a $10,000 balance at 20%, it will take you 60 months to pay off the debt with a $264 monthly payment and a total of $5,896 paid in interest. Your $10,000 would cost you $15,896, which is made up of 37.09% interest charges.

Reducing your interest rates can help you save money and pay your debt off faster.

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How to Maximize your Spending Plan (AKA Budget)

Maximize Spending Plan

Get the Most for the Least by Shopping Carefully

Budgeting can be like strong tasting medicine – it’s one of the most challenging remedies to take, but its effectiveness cannot be denied.  Whether you’ve got money troubles or not, a budget will help your finances.  You don’t make a budget just to fix problems – you have to do it all the time.

A spending plan is more than just a list with numbers.  It’s a willingness to do things that may seem inconvenient at the time, but add up to a considerable advantage when you’re looking to cut costs, without sacrificing quality.

Here are some everyday actions you can take that will make your bottom line look better:

Check Prices
Ok, so you’ve decided to make a purchase, and you’ve budgeted for it.  Before you expend precious funds, make sure you’re getting the best value for your dollar.  Ask yourself the following:

“Can I save money by buying used?”  A lot of times, a used item will serve just as well as a new one.  Appliances, for instance, are often available used, many from dealers who will offer a warranty.  Clothing, too. Many discount stores offer name brand clothing, gently worn, at a fraction of the original cost.  If you’re ok with previously enjoyed clothes, you’ll find that you can start dressing really well for really cheap.

“Is another store having a sale on this item?”  Is the sale good enough to justify the extra travel time and expense?  Try to avoid paying more just for convenience.

“Is it less expensive online?”  Sometimes it’s worth having to wait a few extra days for delivery.

Prepare your Own Meals
We can’t stress enough just how much impact this one simple act can have on your bottom line.  Take out or delivery costs several times as much as preparing a similar item at home, and when you make it yourself, it’s how you like it.  Compare the savings to the time spend preparing meals, and it’s like you’ve got another job that pays really well.

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Tell Your Money Where to Go

Most people avoid developing a spending plan. It’s just no fun hearing the same things over and over – “be frugal, be thrifty, save every penny you can for a rainy day.”

Unfortunately, failure to develop a spending plan usually results in our money waving goodbye every payday, and when bumps in the road occur and they will, (life being, well, life) you find yourself with very difficult financial challenges.

There’s got to be a happy medium – something between the regimented, enforced frugality that is so often presented as the solution to your life’s financial future and the carefree spending that’s going to land you in trouble. Taking control means that you take back full control and “tell your money where to go”!! No more letting it simply wave good-bye!

Save Money with a budget planEnter the Save-to-Spend concept, a system of budgeting that will have you future-proofing your money, while still allowing you to achieve the things you want, and even giving you some “mad money” for the things you didn’t know you wanted. It is really all about pre-planning by putting your short, medium and long term goals on paper. Once you have them, put down what the costs are for each of them. Then prioritize them and determine the length of time it will take you to save for each of them. A simple example is buying a new big screen television. If the cost is $1200 and you want to have it in one year, start putting $100 away each month for it. This is far different then the buy now pay later program where you forget to pay off the interest free loan and end up paying 30% interest back to the day it was delivered. This is an example of a change from that path of instant gratification to one of delayed gratification!

The concept goes one step further and includes the most important part of any plan and that is building your emergency savings account. These are just a few simple examples of a very old concept that we need to return to.

Of course, you can’t make money from nothing, so there are going to be some sacrifices. They will, however, seem unimportant as you quickly see your bank balances grow with all the individual financial goals you have set.

Just remember you need to keep happy while you work within your Save-to-Spend plan! Like dieting, if you tell yourself you can never enjoy one of the foods you love, you’ll likely cheat. If you allow yourself the occasional treat, you’ll be happier overall and are more likely to get the result you want. Save-to-Spend has been proven to be effective.

If you have questions about Save-to-Spend, budgeting, or any other topic related to debt or personal finance, contact Creditaid anytime online or by telephone at (204) 987-6890.