Managing your Debt by Starting With a January detox


By Rubina Ahmed-Haq, Business Reporter, blogger @AlwaysSaveMoney

Christmas is over and you’re dreading the bills coming in January. Did you over do and spend more than you wanted too? This is about the time most of us start realizing how much we’ve gone over budget during the holiday season.  I can’t make the credit card bills go away but I can offer tips and advice to avoid going into more debt and getting financially ready for 2012.




Plan a January financial detox
The best way to save money is to stay home. During the holidays most of spend to much, drink to much and eat to much.  January is the best time to balance your life. Eat at home, take a lunch to work, rent movies and enjoy all the great gifts you got for Christmas. By the time February comes you will be amazed by how much money you saved by just staying in for 30 days. This will also give you a month to think about your financial situation in more detail and make steps to get them in order to manage your debt.

Make a commitment to save
Make 2012 the year you pay off debt and save more money. The first step is to make it automatic, ask your bank to invest $200 a month into your savings directly. By the end of 2012 you will have $2400 in savings. Consolidate and get rid of your expensive loans. Talk to your bank about consolidating all your credit card debts into one loan with a lower interest rate. This will free up extra money that was going to interest. Even $50 a month towards savings will add up to $600 over a year. It’s the easiest way to save money and start managing debt.  Families spend $7200 on groceries every year. Research shows shopping with a grocery list saves 23 per cent. That’s a $1656 saving! Jot down what you need before you hit the store.

Don’t go shopping on Boxing Week
One of the biggest mistakes we make during the holidays is getting caught up in the Boxing Week hype. If you have gone over budget on your Christmas shopping don’t add to the pain by hitting the malls during the boxing weeks sales.  If you do decide to go shopping, really think about what you are buying and remember its not a deal unless you need it.  Try this take look at your own wardrobe before you head out and count all the things you bought on sale that you never use. It will put thing in perspective when you are out in mall.

Don’t spend your Christmas gift money
If you are lucky enough to receive gift cards or cash for Christmas hang on to it for at least three months. I’m not suggesting you use your gift money to pay your bills, but cash gifts do give the option to spend later, and you should. Hanging on to gift cards means you can spend on items in February or March that you can use later in the year. With cash, considering putting it towards your (Registered Retirement Savings Plan) RRSP, sounds boring, but it will help you save money for your future and you can spend your refund once you get it in April. The deadline to contribute is March 1st.

Return or exchange gifts you don’t want
Aunt Edna and Cousin Larry don’t know your size and style and that’s okay. If you get gifts you know you won’t use, return or exchange them, and don’t feel bad about it. A gift that goes unused is just as bad as wasting money. At this time retailers are very sympathetic to people who have received gifts they don’t want. If there was a gift receipt enclosed you can get money back and buy something later. It’s not rude it’s sensible.

Get your bills organized
End of the year means its time to get all your paperwork together to file your 2011 taxes.  Go though your important documents and receipts figure out what you can write off. Visit the Canada Revenue Website ( to see if you qualify for any tax benefits and what paperwork you need to send to Ottawa.  You could save your self hundreds of dollars by just being organized. If you haven’t already, open a TFSA account before December 31st, this will make sure you are eligible for the $5000 savings room for 2011.

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