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Broke After Black Friday? Get your Finances Back on Track for the New Year

If you’re dealing with a holiday spending hangover after recent Black Friday and Cyber Monday sales, you aren’t alone. In fact, the Experian Holiday Shopping Survey has revealed that up to 60% of adults admitted that this type of shopping places immense strain on their finances. 

Getting your finances back on track may seem impossible, but it need not be if you implement the following budgeting tips:

  1. Review your Spending

This is the first and most crucial step to take. Review credit and debit card statements and check to see how much you spent from savings, while also listing the categories where you spent your money – such as food, gifts, entertainment, clothing or gadgets. This will allow you to see where you’ve spent your money, which in turn gives you a good starting point for rebuilding your savings and repaying the debt. 

  1. List Everything You Owe

After seeing where you spent your money on Black Friday and Cyber Money, you’ll need to face reality by listing each debt that has been incurred. When doing this, specify the total amount owing, minimum required payments for each debt and the interest rate being charged on them. 

  1. Pay more than the Minimum Required Amounts

Credit card companies conveniently display the amount of time to pay off your balance and the full amount of interest if you only repay the minimum required amount each month. However, remember that any savings on your purchases will be negated if you only pay back the minimum amount required each month. As such, you should do everything possible to pay a little extra each month – even if it’s only $10 or $15.

  1. Consider the Snowball Repayment Method

After listing your debts, start by applying as much extra money as you can afford to the one that you owe the least on – while paying minimum required amounts on the balance temporarily. This will help get it repaid a lot sooner. Once this debt has been fully repaid, take the amount you were paying on it and add it to the amount you’ve been paying on your next largest debt and so on. 

This strategy will not only help get your debts repaid; you’ll enjoy a sense of victory as you see each one of them slowly disappearing. An added advantage of this method is that by adding amounts to larger debts that were being repaid on smaller amounts will help get them repaid far quicker. 

An alternative approach to this is to repay the debts that are carrying the highest amounts of interest first. However, it may take you longer to start seeing progress this way. 

Getting your holiday debts repaid will allow you to start focusing on saving money because any amounts that were being paid towards outstanding bills can now be placed into a savings or investment account instead. If you’d like to obtain more advice regarding getting your finances in order, contact our team today. 

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How Impulse Spending will Derail your Retirement Plans

Regardless of how frugal a person may be, no one is totally immune to making impulse purchases from time to time. However, the more you give in to this, the more harm it will have on your finances – especially your retirement plans. 

Impulse spending is one of the most common barriers to achieving financial independence, so it’s crucial that you develop a strategy to help you overcome the compulsion to spend in this manner. Below are some tips to help overcome impulse buying.

  1. Calculate an Item’s Value in Time

Most impulse purchases are led by emotions, meaning that engaging the logical part of your brain will be the best way to stop it. An effective way to do this is to stop and think about the amount of time you would have to invest in order to earn what that specific item costs. 

For instance, if you earn $20 an hour after taxes and the item you want costs $300, you’ll have to work for 15 hours in order to afford it. Now, is that impulse purchase really worth 15 hours of your time? 

  1. Don’t Purchase Items that Cannot be Returned

In many cases, the most tempting purchases are those that cannot be returned if you change your mind – such as that final clearance item you’ve seen online or in-store and think the bargain is too good to pass up. There are usually good reasons for items going on clearance – they may not perform as advertised or in the case of clothing items, the fit may not be quite right. 

Most individuals have experienced the awful feeling of regretting a purchase that can’t be returned – at least buying an item that can be returned allows you to undo the damage to your finances once you realize you no longer want it. 

  1. Stop Shopping for Entertainment

If going to your local mall is your idea of entertainment, you’ll need to rethink how to spend your free time so that your financial situation can improve. 

When you put yourself into an area of temptation such as a mall, there’s a strong chance that you’ll make impulse purchases, so stay away wherever possible. Also, refrain from hanging out with friends or family members who shop for fun.

  1. Watch your Savings Grow

Once you stop giving in to impulse shopping, you’ll start seeing just how much money will be saved over time – funds that can be put towards your retirement or other investment accounts. Over time, this could amount to a few thousand dollars – which will have grown quite nicely by the time you reach retirement age.

Although it’s often tempting to spoil yourself with that little impulse purchase, this form of shopping becomes problematic when it starts affecting your finances. If you would like to find out more about how your savings can be put to work and grow as much as possible, get in touch with our financial advisors today. 

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Safeguarding your Health After Retirement

Just because you’ve retired, it doesn’t mean that you have to slow down your pace of life – and a recent study undertaken by the U.S. Centers for Disease Control has revealed that you shouldn’t, especially if you want to remain fit and healthy. The study further mentioned that older adults who remained in the workforce enjoyed better levels of health than those who didn’t, especially if the work they’re doing is physically demanding as well. 

While it may not always be possible to secure employment after retirement age, there are other steps you can take that will help keep you mentally and physically fit and healthy for as long as possible. 

  1. Get that Blood Pumping

Regardless of whether you choose to take to the tennis court, tackle a hiking trail or even play with your grandchildren at the park, you’ll be doing your body good. Engaging in physical activity helps keep promote good bone health, while also improving your balance and physical strength. You’ll also be at lower risk of developing heart disease, high blood pressure and cholesterol-related issues. Overall, a stronger body means that you’ll be at less risk of falling, which is one of the leading causes injuries in older adults. 

  1. Exercise Body and Mind Simultaneously

Other studies have noted that physical exercise goes a long way in helping to prevent dementia and Alzheimer’s, while other research has confirmed that physical exercise helps boost the immune system. Even engaging in slower-paced activities such as gardening and taking a gentle stroll around the block will be beneficial to your body and mind. Combining physical and mental activities will also improve muscle memory, cognitive acuity and balance. 

  1. Let your Creativity Loose

If you’re not able to secure employment after retiring, you can still keep your brain in shape by engaging in freeform and creative activities such as painting, quilting or any other craft you may enjoy. One study confirmed that older adults who engage in creative hobbies at least a few times a week were at far less risk of developing mental health conditions than those who didn’t. 

  1. Renew your Sense of Purpose

Do you enjoy caring for animals at your local rescue center, or preparing meals for those who are unable to cook for themselves? If so, keeping busy with activities like these could add years to your life – along with feeling a renewed sense of purpose in knowing that you’re doing something good for someone else. Studies have confirmed that older adults who mentored children experienced improved levels of mental and physical health, along with feelings of satisfaction.

Keeping busy both physically and mentally will be the best way to safeguard your health during your golden years – along with consuming a balanced diet. Scheduling regular health and wellness checkups and following your doctor’s advice in this regard will also go a long way in helping to detect any conditions that may arise as early as possible, which vastly improves your chances of recovery substantially as well. 

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Why Celebrating Christmas on Credit is a Bad Idea

With the holidays almost upon us, it often means taking trips to visit family, purchasing gifts, going out to celebrate with friends or even a combination of all of the above. If you don’t have much in the way of savings set aside, you may be asking yourself how you’ll be able to pay for it all. 

The above-mentioned scenario has resulted in several lending institutions now offering holiday loan products to clients. However, it’s crucial to remember that these are nothing more than unsecured personal loans being marketed under a different name. While this may seem like the answer to your holiday finance problem, there are many reasons why you should never succumb to celebrating Christmas on credit – especially this form of credit. 

  1. Discretionary Spending is a Bad Reason for Borrowing Money

When you opt for using a holiday loan, you’ll end up paying a high amount of interest for items that you want, but don’t truly need. Regardless of whether you have an excellent credit score or not, obtaining a holiday loan or even maxing out your credit cards will put you in a more difficult financial situation than ever when January arrives. 

  1. You’ll be Making Christmas Even More Expensive

Although purchasing gifts and everything else you’ll need to celebrate Christmas on credit may seem like it will be extending your buying power, the truth is that your buying power will actually be decreased and gift giving will become unnecessarily expensive. 

When borrowing money, you’ll spend more than you would have if you limited yourself to the cash you have on hand. To add insult to injury, the money you borrowed will have to be repaid with interest as well – making your so-called Christmas celebration costlier than you imagined. 

  1. Borrowing Helps Set Unrealistic Expectations

If you ‘do Christmas on credit’ this year, you’ll be helping to set unrealistic expectations with regards to gift giving and general spending for the years to come. It will also make you a lot more likely to depend on credit for the next Christmas…and the one thereafter. 

Borrowing to pay for Christmas will also not only get your children into the habit of expecting large and costly gifts each year; you’ll be teaching them that it’s OK to borrow money so that you can have what you want when you want it – not a good idea. 

  1. The Joy of Giving will be Stolen because of Borrowing

Although your kids will be thrilled to open their gifts on Christmas morning, you won’t be able to truly enjoy the moment because deep down, you know that it’s going to be difficult to repay the amount you borrowed to buy them. You’ll also experience feelings of guilt because you know that those gifts will only really belong to your kids once your borrowing has been fully repaid. 

Instead of succumbing to putting your Christmas spending on credit again this coming year, commit to saving some money each month. By the time December arrives, you’ll have a tidy sum saved up and be able to enjoy a guilt-free celebration. 

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