How to dig yourself out of that 2020 financial hole, according to a credit counsellor
Posted Jan 3, 2021 09:15:00 PM.
Last year was not kind on anyone’s wallet, but maybe this is the year people can get back on track with their finances following the COVID-19 pandemic.
And Mary Huntley, certified credit counsellor at Resolve Credit and Counselling, hopes she can help people get back on their feet by offering a few financial tips before it’s too late.
First, she advises everyone to take a look at their budget every couple of months.
“Take a hard look at the numbers,” she said. “Really [look at] what you’re spending, and where, and think about where you want to make some changes.”
An area of spending that always seems to eat up a lot of money is takeout. While people have eaten out more during the pandemic, it’s just always an area we tend to spend more on.
“Think about where you can get a better bang for your buck with your food budget,” Huntley suggested. “But groceries have gotten more expensive as well. The general cost of living is going up like crazy.”
Another thing some people have spent a lot of money on during the pandemic is home upgrades. If they’re going to be stuck in their homes, why not make it your palace?
The problem with that, Huntley says, is that some have relied heavily on credit to make these home projects happen — and that’s not good.
Especially if a job loss unexpectedly happens.
Investing is another area people can think about — but there’s something Huntley advises to do first before putting your money in risky places.
“Investing is different for everyone — it depends on your comfort level,” she said. “You don’t want to invest money that’s going to be at risk unless you are mentally and financially prepare to take some kind of a loss if that happens. Or look for ways to keep that safer, like a tax-free savings account. It really depends on the individual as to where they want to invest and how. Before I would do investing, thought, I would do an emergency fund, so I wouldn’t have to turn to credit if I have an unexpected expense.”
And lastly, Huntley says to go back to the old notion of “paying yourself first.”
“Make [your savings] a priority,” she said. “If you need to tweak you budget to make more savings happen, look at other areas of your budget to determine where you’re going to save and stick to it faithfully. And have a separate account for that.”