At the beginning of every new year, we typically make resolutions for personal improvement in the coming year.  These resolutions tend to be focused on our physical health – lose weight, exercise more, or eat healthier.  Resolutions should also be made to improve our financial well-being.  Whether you have savings in your bank account or struggle month to month, work full time or are on a fixed pension, we can all improve our financial fitness.

Improve Your Financial Health

Make a resolution today to improve your financial health.  Realize that resolution by taking the first step to setting a budget – keeping track of everything you spend for at least two months.  That means tracking exactly what you spend on food, heat, hydro, gas for your vehicle, right down to buying gum at the corner store.  Fixed monthly expenses are easy – they are typically paid monthly directly from your bank account and thus are simple to track.  Fluctuating expenses are more difficult – find an application on your phone or use the old-fashioned method of carrying around a small notebook and writing down every penny you spend.

Once you have tracked every dollar you spent for at least two months, prepare a summary of your monthly income and expenses.  Even if you are spending less than you are making, and especially if you are spending more, analyze your monthly expenses to see where you can reduce spending.

  • Can you cut back on cable/internet/cell phone services?
  • Can you spend less on coffee?
  • Do you need to buy lunch every day or will packing a lunch save funds?
  • Are there expenses that you incur irregularly (ex. car insurance, sport registration fees) where funds should be set aside monthly?

Now, make a budget using the reduced expense amounts from your analysis above.  Keep the budget taped to your refrigerator or someplace clearly visible as a daily reminder to reduce expenses.  Continue to track your expenses and then compare back to your budget to make necessary adjustments.

Hopefully, in a couple of months, you will have more money in your bank account and feel better about your financial fitness.   If you are still struggling with a significant amount of debt, contact a Fresh Start Now Licensed Insolvency Trustee for a free assessment of your financial situation and details on how to file a bankruptcy or consumer proposal.

By Kathy Lenart – Insolvency Partner, Licensed Insolvency Trustee
CPA, CA, CIRP
Member and Secretary of the Ontario Association of Insolvency and Restructuring Professionals (OAIRP)
Canadian Association of Insolvency and Restructuring Professionals (CAIRP)