How not to slaughter your personal finances this holiday season

Canadians are world leaders when it comes to many things, including binge shopping in December. Economists across Canada are expecting 2017 to be an expensive year for Canadians, as mortgage rules tighten and home values continue to rise. Managing your personal and household finances is essential to ensure you are in a strong financial position moving forward.

Last year, Canadians overspend on their holiday budgets by $397 on average. Limiting your charitable giving isn't a bad thing as long as you are being smart about it. Here are some tips to help you avoid spending more than your budget for this holiday's gifts:

Ignore the hype

Don't fall for store marketing ads attempting to lure you into putting your purchases on a new, store referred credit card. Stores love to advertise a "Buy now, pay later!" promotion. These types of cards come with high interest rates (19.99% or more) and can affect your credit score. If you are not in a strong position to purchase most of your gifts through cash or debit, max'ing out your credit cards will end up costing you much more in the long run. Paying the monthly interest over the course of next year will result in you spending hundreds of dollars more than you would have, had you paid cash.

Keep gift giving to a minimum

For close friends and family, keep it to one or two gifts. There are plenty of ways to show your friends and family how much you appreciate them, without having to put yourself in a troublesome financial position.

Budget in advance

Prepare a bank account friendly budget before beginning your shopping. Plan out your monthly obligations first (especially for December and January), such as your mortgage, rent, utilities, car payments, groceries, etc.. Then factor in the remaining amount for your shopping. Stick to this budget and you should find yourself in a much better position after the holidays.

Avoid using credit cards

Unless you are absolutely sure you can pay off your credit card purchases by the end of the month, avoid using them. The interest will start to pile up very quickly.

With spring just around the corner, many Canadians will begin searching for a new home to buy as the Real Estate market begins to heat up. Carrying a huge load of debt can impact your overall mortgage approval, thus it is extremely important to keep on top of your finances. If you are a potential homebuyer looking to begin shopping this spring, contact a Mortgage Broker today to find out how much you qualify for and whether there are any immediate financial issues that may stop you from buying down the road.

Click here to read the full article on the Globe & Mail.