When we think financial restart, it’s usually at the beginning of the year.
Who can blame you, after the expensive holiday season its a natural New Year’s resolution — to save more money. But the fact is summer is a more expensive time of year. The two-month long event is filled with expensive vacations and family barbecues. All this fun can make a big dent in your financial progress. That’s why September — not January — is the best time to do a financial check-up.
How much are we spending?
In its latest survey of summer spending, BMO said Canadians planned to spend an average of $5,605 during the summer. A survey conducted by another bank — CIBC — revealed half of those surveyed will need to dip into their savings or use their credit cards to make the most of the warm summer months. And 40 per cent say they spend more money in summer than during any other season. No matter how you look at it, the bills pile up more in the summer than any other time of year and that is why a financial checkup is so important in September.
How to get started on your Fall Financial check up
The first step is to tally up how much your summer fun costs you, then figure out how much of that is debt. This includes line of credit loans, charges on your credit card or even a loan from a friend. It’s good to have get a clear picture of your personal finances.
Next list your debts in order of interest you are paying. Start with most expensive and work your way down. Any debt held on credit card and store cards will be first and lower on the list will be your line of credit debt or a loan from a friend.
Finally, check if there are any bills you forgot to pay. This could be a utility bill or mortgage payment — anything that slipped your mind during the summer months.
Lay out a plan
Start your plan by finding out what your minimum payments are on each debt you owe. Now, can you pay more than that? If you can put those extra payments towards your highest interest loans, start there.
Next, see what bills you can hold off on paying until October. This may seem like a bad move, but by paying a small late fee, you could free up enough cash to pay off your most expensive loans. This could result in more money to make payments on your other bills in October. Be sure to contact the companies you’re planning to make a late payment to in order to make sure it won’t affect your credit score.
Finally, this is a good time to consider your RRSP contribution. Are you on track to save what you wanted for 2016? Also, once your bills are paid start putting some money away for the Christmas holidays. Even $50 a week will add up to $700 in 14 weeks.
Fall is the best time for a financial checkup. The best part is in January, when everyone is scrambling to get their personal finances in order, you will be feeling completely in control of your money.
RUBINA AHMED-HAQ is the Finance Editor for HPG. You can read her musings in Condo Life and Active Life. She’s also the Family Finance Advisor for PC Financial. She regularly contributes on TV and radio including CBC Radio, CBC News Network and Global News Toronto. Follow her @alwaysavemoney