November is financial literacy month – and isn’t the timing great? Yes, we are just at the beginning of the holiday season (everyone has a different date they officially declare it the holiday season, but we all know retailers have been there since September) but now is the time to give some serious thought to your own financial situation ahead of the holiday spending season rather than in January, when you could be left with regrets.
This week November 6-10 is Credit Education Week (again, great timing) and as part of that, we’re taking a look at guilty pleasures once again on Feisty Frugal & Fabulous, and how they can wreak havoc on your bank account if you don’t pay attention.
We all have guilty pleasures! According to the ‘Guilty Pleasures’ study, Canadians overwhelmingly admit that restaurant food is their most popular indulgence with 72% of responders highlighting dining out and 71% admitting they order takeout more than a few times a month, resulting in spending over $199 monthly. Guaranteed our restaurant bill is over $199 monthly, yikes!
Other guilty pleasures highlighted in the study include daily coffee purchases (50%), online shopping (44%), clothing purchases (33%) and beauty services (23%). Are you mentally checking any or all of these on your own guilty pleasures list? Has it become a problem for you?
When does it become a problem? Well, when you’re sacrificing your own savings goals and see your debt adding up (like weight, it can creep on slowly and suddenly you realize, if you’re being honest with yourself, you’ve indulged for way too long when you knew better!)
The comforting news is, you’re not alone. More info from the Guilty Pleasures study: While 65 per cent of Canadians believe they are in good financial standing, one-third (35%) rate themselves as being in fair or poor standing. 36% admit to not putting anything towards savings each month and 25% of Canadians admit their guilty pleasures spending has kept them from achieving their financial goals.
Now. Today. Ahead of the holiday season and all the impulse spending that our guilty pleasures entice us to embrace, what can Canadians do? Here are some awesome tips I received from Capital One Canada and Credit Canada to help keep indulgent spending in check:
1. Build a Budget: Create a realistic budget based on your income. Include necessary expenses like your mortgage, gas and transportation, saving for the future and any discretionary spending. Place spending limits by categories in your budget, and then take your budget for a test drive. Remember that tools like a budget calculator can help identify areas that you’re spending the most in.
2. Track and Evaluate: Track your spending regularly against these set categories to see where your money is actually going. A budget tracker can help track this against your budget, as well as looking at your credit or debit account statements. If guilty pleasure spending is getting out of hand, re-evaluate how often you indulge or consider a cheaper alternative.
3. Mindful Monitoring: A credit card offers many perks, but it’s important to use it responsibly to reap all the benefits. If you’re consistently holding a balance on your card at the end of each month, take a step back, review your budget and see where you can find efficiencies. Tools like Credit Keeper™ can help you better understand credit and the importance of a healthy credit score to your overall financial health. Credit building programs designed to teach Canadians how to build or rebuild their credit and increase their credit score are also a good resource.
Disclosure: This is a sponsored post in partnership with Capital One. All commentary, opinions and witty remarks are my own, obviously.