One of the most significant reasons why people may find themselves in debt is due to overspending. Maybe you are unsure how to put together a proper budget for your expenses, or you have a hard time reigning in your spending on “nice to haves”. Our team at D. & A. MacLeod Company Ltd. offers credit counselling for consumers in Brockville, Kingston, Ottawa and surrounding areas. Using our home budget calculator, you can also put together a solution to understand just how much discretionary income you have left each month.
Neglecting to Set a Monthly Budget
The first step to financial stability is knowing how much you earn each month and what your expenses are. Setting a realistic and conservative budget is important to avoid debt. If you are too overwhelmed to start on your own, our team can assist in analyzing your financial situation and putting together a budget that works for you.
Spending More than You Earn
Determining your actual take-home income each month, rather than your salary before taxes, is a more accurate picture of the money you have for bills each month. Spending on more frivolous items like clothes and gadgets before paying expenses is an obvious concern.
Reaching or Regularly Exceeding Your Credit Card Limit
While important for developing a line of credit, credit cards are essentially money you do not have upfront. Your bank sets a limit for good reason. Spending up to the maximum each month means you are making excessive purchases and paying interest for the privilege when you do not have the cash to meet your monthly expenses. Instead, consider paying with debt or cash so you know exactly how much money you have to spend.
Only Making your Minimum Credit Card Payment
A minimum payment protects your credit card company, but it could translate to growing debt. The longer you take to pay off a credit purchase, the more interest you acquire and the more expensive that item becomes. If you find yourself struggling to meet credit card payments, we can provide debt help in Ottawa, Kingston and surrounding areas and will develop a solution that meets your unique situation.
Spending More as your Earn More
Treating a salary increase, a sudden inheritance, or lowered expenses when dependents move out as automatic excuses to spend more is dangerous. This extra money should not mean excessive banking transactions. In fact, the less of it you spend, the more you can save and grow through investments and interest from the bank.
Tips to Reduce Impulse Purchases and the Need for Debt Help in Ottawa
Develop a Budget At D. & A. MacLeod Company Ltd. our team of professionals can help you to determine your income and group expenses into those that are the same each month (such as mortgage and car payments), those that vary (such as utilities and gas), and the extras (such as clothing and takeout dinners). Commit to saving the same amount each month and transfer it to an RRSP or TFSA so it is untouchable. Then, make any necessary amendments for the next month.
Use Cash or Interac, not Credit Cards Forgoing credit cards means you need the money upfront to make purchases and avoid the risk of spending more than you have or owing interest. When developing your budget, determine how much money there is for expenses before making any discretionary purchases.
Choose Cheaper, Cost-Effective Options Find affordable substitutions for your fun activities so budgeting does not leave you feeling left out. Try touring your own city and enjoy what people outside your city come to visit. Experience a meal at a more conservatively-priced restaurant and limit drinks to save money. You may also consider cooking meals at home more often and packing leftovers for lunch to avoid the temptation of eating out.
Set Monthly Financial Goals Our team can teach you how to be mindful of your monthly purchases, stick to a budget, save, reduce credit card purchases, and make lifestyle adjustments that will help you curb overspending. By setting monthly goals, you will feel proud of your accomplishments and become more equipped to save for larger future goals.
Value Your Money and Give Yourself a Reward Think about how long it took you to earn the money you instinctually want to spend so quickly. For example, you probably don’t want to use a day’s worth of work on one pair of shoes. If you follow a budget and reduce your spending, you can even afford to treat yourself once a month with a new item or a nicer dinner out. There will be less stress in your family life when you have spending under control.
Contact us for Credit Counselling and Personal Bankruptcy Solutions Financial responsibility is often challenging, even to those who are not regular over-spenders. At D. & A. MacLeod, we are available to work with you on budgeting, and also provide credit counselling in Kingston, Brockville and our 6 other locations including Ottawa, Smiths Falls, Orleans, Pembroke, Cornwall, and Kanata. Ease your financial stress and book a free consultation with us today at 613-236-9111. Return to blogs