Canada Day Resolutions

Most people make their New Year’s Resolutions on January 1, since that’s the start of the new year. That’s a difficult time of year to start a new diet, fitness program, or other life changing activity, since you are still recovering from Christmas, and have a long cold winter ahead of you. I think Canada Day, July 1, is a better time to review your goals and make plans for the future.

Canada Day is the perfect time to review your finances (and your life). It’s the start of the summer holiday season, so you are probably not as rushed and hurried as you may be during the Christmas holiday season. Here’s what I suggest:

First, make an inventory of your finances. Make a list of who you owe money to, including the name, amount, interest rate, and monthly payment.

Second, make a list of what you earn each month, and what you spend. (Use the internet if you need help with making a personal budget).

Third, make a list of what you own, and what it’s worth, like your house, car, RRSPs, and other investments.

Now, look at these three pieces of information: what you owe, what you own, and what it costs you to live each month. What kind of shape are you in? If you have no debt, you have no worries about making payments on your debts each month. If you have more debt than you can handle, you need to make a plan, a Canada Day Resolution, now. You should review your debt options and make a plan, now, to deal with your debts.

The first action step is to cut your expenses. Take the budget page you created and go through every item, and see what you can cut. For example, it’s the middle of summer, and you spend lots of time outside. You spend very little time watching television. Do you really need 500 channels on your cable or satellite service? No, you don’t, so call your cable or satellite provider and cancel everything but basic service. Even better, cancel everything. With the new digital signals it’s possible to put a small antenna on your house and get all your local channels, in high definition, for free! That sure beats paying a monthly bill. (Don’t worry, when winter returns you can always call your service provider and re-start your service).

How about your phone bill? Do you really need call waiting, caller I.D., three way calling, and all of the other services you are paying for? If not, cancel them. Do you really need a cell phone and a home phone? Many people have eliminated their home phones, since they are never home anyway, and use a cell phone for everything. That’s a great idea, but only if you have an inexpensive plan, preferably with free evenings and weekends.

Look at your grocery bill. It’s summer. Local farmer’s markets and roadside stands across the country have fresh, local, healthy, inexpensive produce. Buy it fresh every day. Stop spending money on canned and processed food. Save money and eat better this summer. And, if you have access to a small plot of land, plant your own. It’s not too late to plant beans, carrots, and many other vegetables that you can start eating two months from now. Next year, start earlier for even greater savings.

What about transportation? Do you really need to drive everywhere in your car? The weather is great: walk, or ride your bicycle. It may take a bit longer to get there, but you will get great exercise, and save lots of money.

If you can cut your expenses, you can free up cash to repay your debts faster, or to save for your retirement, or your children’s education.

Canada Day is one of my favourite holidays of the year. (Of course I’m old fashioned; I still call it Dominion Day, but that’s another story). It’s a day that’s all about fun. No presents to buy, no fancy meals to prepare. You spend the day with family and friends, you cook outside on the barbecue, and you can even enjoy a cold pop. Make the holiday even better by spending an hour or two this week reviewing your finances, and making your Canada Day Resolutions. Here’s to a great summer!

A Licensed Insolvency Trustee