Going Broke Isn't Cute

It's only a few weeks after Christmas and you are probably starting to feel the effects of your pre-holiday spending frenzy. I've got some news for you, the hangover only gets worse from here on out if you don't nip this in the bud today! The average Canadian shopper racked up their cards to the tune of  $1200 for Christmas gifts alone. This figure is exclusive of all the holiday parties, swollen grocery shops and goodies for neighbours, friends and colleagues! What happened to the recession?

 Well it appears that Canadians have more credit to spend now than they have had in the last thirty years, and it's frightening. America is fairing worse in this delicate economic climate with the USA credit load in the high billions. So with this in mind, why does it feel like everyone can spend like their millionaires? Well, for one, retail stores were egging consumers on with deals like "buy-one get-one free" and sales that went up to as much as 90% off! (Sort of makes you question whether the assumed value of some of these consumer goods is a just representation of what it costs to produce them!).  Retailers rely on impulse buys and a lack of rationalization on the behalf of the consumer.

So after you've raided the Gap's shelves dry and you've snagged as many pairs of Nine West your closet can hold, you tell yourself it's all justified, because it was on sale. Right? WRONG! Ask yourself why you think it's okay not to pay your lighting bill, or your cell phone bill, services you take advantage of regularly, but you've decided they are no longer priorities, but a new Kate Spade handbag is? Give your head a shake. If you can't afford to pay your utilities, feed yourself, and clothe yourself, modestly, you have no business blowing money that isn't yours on items of luxury.
If you don't want to be paying off your holiday thrills from 2011 in 2013, it's time for a gear change.

1) Stick the credit cards in a yogurt bucket, pour some ice in and place it in the freezer. You are done with those babies until you are free and clear of your credit card debt.

2) Make a weekly or monthly budget ands start tracking your expenditures. It's time to separate your needs from your wants. And no, getting your hair done twice a month, is not a need. Get real! Since you have no plastic to save your behind, you will have to learn to discipline yourself not to blow copious amounts of cash. There are number of fabulous budgeting tools online that can help you determine what your household expenses are. We often forget about little things that sneak up on us like pricey prescriptions, or an unforeseen car repair.

3) Set goals, and be realistic! Look, if you're making  $10 and hour, and you're in $15,000 in debt, you're not going to be able to pay off your debt and buy a masarati all in one year (unless you win at Bingo!) Don't set the bar so high that you'll want to give up half way through. Give yourself a reasonable target and a modest reward at the end so you feel like you've accomplished something. There's nothing more liberating than feeling debt free, with no fear of looking over your shoulder to repay someone you owe money to. And save the plastic for emergencies, not some off-the-cuff shopping spree that will have you financially crippled for the rest of the year!