If credit card debt was the main cause of debt, pay the balance off as quickly as possible to avoid high interest rates (Getty Images/Natalia Gdovskaia)
You’ve had the family dinner, exchanged gifts, rung in the New Year, and the holidays are over. According to CPA Canada’s 2022 Holiday Spending Survey, 22 per cent of Canadians likely took on debt to pay for holiday spending this past year. If you find yourself in this camp, now’s the time to take action.
If credit card debt was the coal in your stocking this past holiday season, you’ll want to pay that off as quickly as possible to avoid high interest charges. Then, focus on building an emergency fund to prevent unanticipated expenses starting a new debt spiral. Budgeting can be your best friend, as pinpointing how much money you have coming in and going out each month will help you pay off current debt and avoid more debt in the future. The upcoming season of CPA Canada’s award-winning Mastering Money podcast will focus on conversations around debt and how to overcome it.
2022 saw plenty of financial turmoil and 2023 could be as dramatic. The question is: how will you handle debt differently this year? Will you think about changing your spending habits for the 2023 holiday season? In a world where we need to be ready for anything, thoughtful preparation has never been so important. Remember to align your spending and financial planning with your core values, and don’t let money slip away due to inattention. You’ve got this!