How to use visualization to stop overspending
Before going to a place where you tend to overspend take a few minutes to yourself to visualize yourself entering the space. Make yourself aware of all your senses. What does the place smell like? How does it look? Who are you with? How does it sound? Will you be eating or drinking? Tap into all your senses and get started.

1. Find a comfortable quiet place to sit and have something ready to write notes on
2. Imagine yourself entering the space
3. Imagine yourself walking around the space or browsing the site just as you would in real life
4. Take notice of any triggers that might make you put something in your cart. Is there a sale, does something look new, is there a bright eye-catching display, are your companions buying things?
5. As you take notice pause to write down the items you are adding to your cart and write the estimated cost of this item.
6. Complete the steps above until you have left the site or the space
7. Once completed read over your list and add up all your purchases
8. Does the cost fit into your budget? If not, scratch off the list all the items you can put back
9. Recalculate your list to see if it fits within your budget

Based on your discoveries, you might realize that if you went into those spaces or sites without a plan you will overspend your budget.
If you are looking for help with overspending and want more tools and strategies click here to make an appointment with our Financial Coach

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1. Prioritize your list

   Everyone has heard that we should make a list before we go shopping. There is a lot of value to this suggestion. Before the Christmas season starts in full swing we may have an idea of how many people we want to buy for, however, this isn’t always realistic, so that is why prioritizing is so important.

   • Before going to the store or shopping online write the list of everyone you want to buy for with a dollar amount beside each name.
   • Add up the totals. Does this fit within your budget? If not it is time to prioritize.
   • Put everyone in order starting with the people you must buy for and include the dollar amounts.
   • Now it is time to make some cuts or get a bit more creative with the gifts in order to lower costs.

 

2. Let’s change our perspective

   A lot has changed over the past few years. Many people have mentioned how much they need human connection. We have heard some say they want less stuff and want to connect with families and friends more. Others have had their income drastically reduced for the first time in their life, and now we are all experiencing the effects of inflation. Times are tough financially for a lot of individuals and families. There is a post circulating social media that says “ If someone works $15/hr and they buy you a $45.00 gift they have spent 3 hours of their time working to get you this gift” That really highlights how much this person values you when they are putting so much of their time into buying a gift. Instead of thinking of the amount spent on a gift, let’s appreciate the thought, and time put into it. Here are some low-cost suggestions to let someone know you care.

   • Offer the gift of time – Make a drive to see someone, find a new trail to explore with your friend or family member who loves to be outdoors, or make a video to send to someone who misses you.
   • Offer the gift of service – Change someone’s tires, make someone a homemade meal, or offer to babysit for those parents who just need a few hours to themselves.
   • Buy Nothing Groups – Most communities have a Buy Nothing group on Facebook. Join and see if anyone is giving away something you know someone else would really like. Be sure to post something to give away as well, you could be helping out someone in need.
   • Market Place, Kijiji, thrift Stores, buy and sell groups- You can find wonderful gently used items for a fraction of the cost. Especially children’s toys, books, sports equipment, and tools. When you buy from one of these places, you are helping out another family and also reducing waste. Win-win.

 

3. When out shopping try and stick to your list

   A list will help you stay focused and not get distracted by all the marketing tactics you see in-store or online. Many of you have gone shopping with the intention of getting just one or 2 things, but when you get to the checkout your cart is full. This isn’t just specific to Christmas. These tips can help you no matter when or what you are shopping for.

   • Try a visualization exercise before you go out shopping. Close your eyes and picture yourself going through the store. Make note of all the senses that are triggered such as the smell of baked goods, the bright Christmas displays, the sales racks. Will any of these trigger you to overspend? To learn more about visualization to reduce spending click here
   • When trying to find the perfect gift within your budget go ahead and fill up your cart, you might stumble across some amazing deals this way.
   • Before you checkout go through your cart and compare it to your prioritized list and the amount you allotted to each person. You now need to start weeding things out and putting things back that don’t fit within the budget.
   • If possible, try to shop alone so you aren’t distracted and veer from your list due to other people’s opinions.
   • Shopping early can avoid panic shopping, but it can also make it easier to forget what you already bought. This can result in overspending your budget. Keep your list updated when you buy something so you don’t forget what you purchased months ago.
   • Try to shop deals when you can, and keep receipts. Many stores will honor a deal when you bought something earlier at full price but then it goes on sale a bit later. You can then return it and purchase it at the lower price.

 

4. Hosting Dinner

   Many underestimate how much it costs to always be the host. Some Christmas dinner guests also don’t realize how much their host spends to create such a lovely holiday meal.

   • Try price matching
   • If you price match for all your groceries year-round, you could open a separate savings account and put the amount saved from price matching in that account. That account can now be your holiday meals account.
   • Shops sales and try to plan some of your holiday meals around the deals
   • Ask people to chip in and bring an item such as dessert, dinner rolls, salad etc.
   • If you are the guest and can afford it, offer to make a side dish or anything that can contribute to the meal.

 

5. Preparing for next year

   If come January you realize you overspent on credit or went over your savings budget try these tips.

   • Your first priority should be to find a plan to get out of debt as soon as possible, or else the amount you spent on Christmas will continue to increase due to interest charges. If you need help developing a strategy to get out of debt contact one of our Accredited Financial Counsellors here.
   • Next, you want to figure out how much you spent this year. Was this amount realistic? Or did you overspend?
   • Based on the above, determine what the realistic amount to spend is, and divide that by 12 so you know how much you need to start saving each month.
   • Give your individual saving accounts a name and you will have a better chance of success because you will see yourself getting closer to each specific goal. You could have a holiday gift account, holiday meal account, or holiday travel account for example.

Remember that having a successful spending plan for Christmas doesn’t just start in Dec. This should be something we think about and plan earlier in the year or even year-round.

Jeri Bittorf is the Financial Wellness Coordinator at Resolve Counselling Services of Canada. She has been helping people create a spending plan and pay off debt for over 13 years. She is an Accredited Financial Counsellor AFCC – Canada ©, a Certified Credit Counsellor, and an Insolvency Administrator and Counsellor.

Resolve Counselling Services of Canada is a not-for-profit counselling agency that has been helping people improve their social and economic well-being since 1968.

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Read more here

https://ottawa.citynews.ca/local-news/how-to-dig-yourself-out-of-that-2020-financial-hole-according-to-a-credit-counsellor

or listen here

If you looking for some advice or just have a question, give us a call 1 800-379-5556….. we are here to help.

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There is no denying that COVID-19 will have short and long term effects on families. This is a shared experience for all Canadians, and Governments and financial institutions are doing all they can to assist during this time.

Resolve Credit & Financial Counselling Services has been advised that creditors will work with clients on a Debt Management Program during this difficult time and if you are a current client please be advised that while our offices are closed, our credit counsellors are still available to support you via phone and email.

1-800-379-5556 or info@resolvecounselling.org

We encourage anyone that is concerned about creditors response to the pandemic to call a Credit Counsellor for information regarding their situation.

We are working diligently to collect a list of resources and customer service numbers that we will share on our website and Facebook page in the coming days.

Please take of yourself and your family, remember we’re all in this together and are here to help.

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Another statistic says that 15-20% of after-tax income can be spent on debt repayment, excluding mortgages. Then, follow the golden rule and “pay yourself first” with 10% of your income set aside for savings and/or retirement. This helps us build that 3 month cushion we all know is necessary to be prepared for the unexpected.

This leaves the final 20% for everything else. To put all these statistics in real terms, a person who makes $30,000 (about $14.50 hour) has roughly $550 each month for food, gas or transit, insurances, toiletries, entertainment, gifts and clothes. We won’t even mention what happens if you smoke or like a bottle of wine with dinner.

Not adding up, is it? It’s a likely bet that many people use their 10% “pay yourself first” portion on debt repayment and/or daily expenses. No emergency fund…scary! On that same $30,000 income, your allowable debt repayment would be about $380 each month. This is roughly what it averages to buy or lease a mid-range new car. That means if you’re paying for a car, you can’t afford any other loans or credit card payments unless your housing cost is lower than average.

What can you do if you’re already saddled with loans and credit cards?

Look at paying off high interest debt as an investment. If you owe $5,000 on your credit card at 19.9%, compare that to the 1% you would earn on an investment certificate. It becomes obvious that you’ll want to knock down that debt as quickly as you can, still realizing that you do need an emergency fund.

Getting worried yet? We don’t get guarantees that our current income or standard of living will continue and I think a healthy dose of paranoia never hurt anyone. Try to keep any non-essential debt to a minimum. If you must buy on credit, ensure you can factor the debt repayment into your budget. If your budget doesn’t balance then you’re taking on a debt you can’t manage.

Weigh every credit purchase against how long you will pay for it and the real cost with interest and service charges. Is a $350 item really worth in excess of $700 to you? Credit Card bills now disclose how long it will take you to clear your debt making the minimum payment only. Look for it…it’s a real eye opener!

Remember, Credit Counsellors at a not-for-profit agency are always happy to help you review your budget and options.

PDF version: How Much Debt can I Manage?

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There are always times when credit is necessary as very few people can afford to buy a home without a mortgage or buy a car without a car loan. There are, however, other items that are much more affordable if they are purchased with cash from your budget rather than by using credit.

Remember that if you do not pay off your credit cards each month that you will still be paying for the original purchase you made for many years. If you are simply paying the minimum payment each month a large part of that payment is going strictly to pay the interest and so that original purchase is becoming more and more expensive each month.

It is important to try and only charge items to your credit card that you know you can pay for at the end of the month when your statement arrives. If you do not follow this rule you run the risk of having your credit card bills spiral out of control.

Do you have debt problems or need help budgeting and managing your money better? Have questions? Need more information? Ready to get started on reducing debt and reclaiming your quality of life? Contact us today! 1-800-379-5556

Check out People We’ve Helped – This is Ryan’s Story

ASK THE EXPERT HOW DO I AVOID CREDIT CARD PROBLEMS

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Even though there is plenty of information for students to access, students are telling us the bureaucracy is tricky to navigate, and when there is more than one debt they are unsure which one to prioritize.

Here are some tips for students:

• Keep your address up-to-date with all creditors.
• Set up a budget and stick to it.
• Many banks have Student Bank Accounts with No Fees.
• If you have a Student Credit Card, pay it in full every month. If you can’t pay it in full – STOP – using it until the balance is paid in full.
• If you can’t afford the payment on your government student loan, contact your provincial/territorial student assistance office to ask about the repayment assistance program.
• There is no interest on government student loans while in school, however, typically interest is charged monthly on Student Lines of Credit (LOC).
• You can claim the interest paid on your government student loan as a tax credit on your income tax return.
• Interest paid on Student LOC does not qualify.
• Student LOC are typically co-signed, often by parent’s, because many students do not qualify on their own. It is important to note that the co-signer is responsible if the student defaults. And from a parent’s perspective their financial exposure may be multiplied by the number of children they have. So parents may want to consider limiting the amount they co-sign for. I suggest canceling the limit on the Student LOC when the student graduates, to ensure the debt will be paid down from this point forward. The co-signor can also request this.
• I suggest that students first apply for the maximum government student loans, bursaries and scholarships, and then apply for a Student LOC.
• Student Loans are an interest rate risk.
• If your student loan is already in arrears and you feel overwhelmed, contact a non-profit credit counselling organization. We will assess your total financial situation and can give you guidance to help navigate the red tape.

PDF Version: Tips for Students

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The first step to a successful budget is knowing where every penny is spent over a one-month period. Write it all down, carry a small pad with you or keep all receipts. Track all spending including trips to the corner store and the coffee shop.

Step 2: Get Your Money’s Worth

Are you getting the most value for your dollar? These are a few examples of expenses most of us could find a way to reduce: banking fees, grocery bill, phone and cable services, insurance costs, fast food and coffee shop purchases.

Step 3: Prioritize Your Expenses

Let’s face it, we all have expenses that are more important than others. For instance, groceries for the week take priority over Friday pizza night every week. If you really like having a pizza night you could work it into the entertainment portion of your budget every 2 weeks.

Step 4: The Envelope System

Every payday, withdraw the cash that you will need for groceries, gas, entertainment, etc… until your next payday. Put the allotted amount of cash into envelopes that correspond to your budget. When it’s time to buy groceries or gas for example, take the cash you need from the appropriate envelope, and leave your bank card at home. It’s a different experience shopping with cash and a list. You can use a different system but the concept is still the same.

Step 5: Creating an Emergency Savings Account

A major cause of financial trouble is the inability to save money. When we don’t have money in our savings account, we rely on credit every time something out of the ordinary happens . Car repairs, Christmas, and back to school should not be considered emergencies; they are facts of life; we can plan for them. Continuing to use credit for these types of expenses will eventually lead to maxed out credit cards and increased financial stress.

Please do not hesitate to contact us for additional information to help you create and implement your own personal budget.

Click here for a printable budget form

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“All through school I’d managed to stay out of debt. Now that we were married, I saw that my husband didn’t manage money the same way. We had two ways of looking at things. I went along at first -buying everything at once so that our home would be perfect. But when an unexpected layoff cut our household income by half, the debts overwhelmed us. Collectors were calling all the time, at home and at work.

Fortunately we found Resolve Credit Counselling, and our Counsellor was great. Without judging us or what we’d done she calmly helped us to establish a spending budget that worked. She called our creditors and got them to back off and negotiated reduced payments that we could afford. Mostly, she made sure that we talked through our goals to get perspective on where we’re going. We’re fine now and we’re right on track!” – R.W.

Accidentally In Debt With No Way Out

“What a disaster! Joan and I we’re driving to Sudbury during a snow storm. A pickup truck pulled out in front of us and I swerved to miss it. Bang – our car caught a pole and flipped over! Joan was hurt and I was a real mess. I’ve was off work now for 18 months, and Joan was home with me during the day and pulling night shifts at work. Her wages didn’t cover all the bills. We didn’t know what to do when the card company started action to garnishee Joan’s wages.

We’d have lost everything if we hadn’t found Resolve Credit Counselling when we did. They made arrangements with our creditors so that we could avoid bankruptcy and keep the house. They actually got our bank and the credit card company to reduce the payment and to freeze the interest. I should be back to work later this summer. If it weren’t for the support from Resolve, we could have lost everything!” – P.T.

One Family, Two Households

When the divorce came, I did everything I could so that my kids could stay in the family home. I figured that since I’m in sales, I could work harder to support two households. I’d under-estimated how much the stress would affect me. I ended up in real trouble – not earning nearly enough, and borrowing from Peter to pay Paul! The crisis came when I foolishly resorted to getting pay day loans!

My Dad knew about Credit Counselling and insisted I book an appointment. I’m truly grateful he did! My Counsellor stepped in, called my creditors, and the collection calls stopped right away. Finally I was free to focus on my work! The repayment plan he negotiated gave me the breathing room I needed to turn things around. My earnings have improved, so it’s all a little easier. But the big change is that I plan and budget now. I learned that from Resolve Credit Counselling.” – M.A.

Successful To The Bitter End

“I’m 51 with two kids in university. Until last year, I was a highly paid executive. Now, the best thing I can say is that I have a job – not a good one – but at least I’m working. Of course, when the trouble started, I tried to stay confident and upbeat. I didn’t want to worry my family, so I let everyone keep spending as though I had an income! In 6 months, my credit line was maxed out and I had $32,000 in new credit card debt! I was at my limits and about to miss payments.

My new boss was great. First off, he gave me a job when most companies wouldn’t give me an interview. Then he figured out I was in financial trouble and suggested I call Resolve Credit Counselling. My Counsellor was my coach, my advocate, and my financial advisor. I dropped the sports club and golf memberships, sent my kids to Resolve Credit Counselling to discuss their student loans, and settled into a lifestyle that fits my paycheque and budget. Thank goodness for Resolve Credit Counselling! – B.K.

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