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!

Top Five Budget Boosting Tips for Your First Semester

College is expensive, and that's a fact. The sooner you get used to the idea, the sooner you can learn how to maximize your spending abilities. Countless college students graduate from their studies, absolutely saddled with debt, and little hope of paying it off in a reasonable amount of time. Your hard-earned years at college may translate into a great salary, unfortunately, much of it can be eaten up by debt repayments. You're not going to study computer forensics for several semesters, only to line the pockets of the financial aid office. You're going to school to get a better salary and a better life! So, if you don't want to be another statistic, here are 5 things you can do to help keep your spending in line and money in your wallet:

1) Scholarships and Bursaries. This is a great tool to help those students who may not be able to fund themselves through their education. And let's be honest, that's probably most of us! There is a plethora of available college scholarships just waiting to be applied for. The financial aid office at your institution will have a list of these available awards. The scholarships that offer more money, often have a lengthier application process and may require a certain GPA. Others can be as simple as writing a short essay, gathering reference letters, or based on extra-curricular activities. Rest assured, there are something for everyone, and with bursaries, there is no requirement to pay the funds back!


2) Text Books. After you've been accepted to the accredited program you desire, and paid your tuition, there is the matter of text books. Text books, on average, can cost students an extra $1000 per year. The best way to pare this amount down is to hunt around for used books. Check for used text books sales at your institution, or buy your books on amazon.com You can often find books on there for less than half the price of brand new books. When your semester is over, you can sell them to another budget-conscious student. It's good karma!

3) Credit Cards. Let's face it, we've all used our credit cards a little (or lot) more then we should. A gorgeous pair of boots we just couldn't resist, a new gadget, or an epic night out at the bar, we've all done some damage. College is no time for messing around, the potential to bury yourself in mountains of debt is far too great not to be paying attention. One of the first things you should do, is to lower your credit limit, IMMEDIATELY! Lower it to an amount that you know you will be able to pay back in a reasonable amount of time. The second thing you need to do, is negotiate the lowest possible interest rate. Shop around online for credit cards that will offer you maximum benefits with the lowest possible interest rate.

4) Bank Account. ATM fees add up, and as a college student, you are going to need cash for all sorts of things. We often forget that the convenience often costs us a pretty penny by the end of the month. ATM fees, interac fees, transfer fees, sometimes it feels like life is one big fee! Well, it kind of is. Go to your bank and negotiate an all-inclusive bank account. Transaction fees, transfer fees, and even cheques should be included for a nominal rate per month. Most banks offer a student banking package, that often include a low interest credit card without a yearly fee.

5) Workable Budget. After you've put the framework in place to ensure you're stretching your dollars as much as you can, it's time to put together an iron-clad budget. It's essential that you calculate fixed expenses and variable expenses. Rent, utilities, and insurance payments are all costs that should be included in fixed expenses. Gas, medical/dental, and groceries are all things that should be included in your variable costs. Tally up your total income for the month, and break it down into weeks to make it more manageable. Trust me, putting yourself on a budget will actually help alleviate financial stress. When you're out partying with your friends, you'll know how much you have to spend, there's no guess work involved!