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Shopping without thinking

Shopping without thinking
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Impulse spending can wreak havoc on both your budget and your emotions – those “good vibes” from your purchase very quickly turn to feelings of guilt and shame.

The solution: Figure out what triggers you using the TEMPO acronym – T: time; E: environment; M: mood; P: place; O: occasion – and find alternatives to spending money. In the meantime, consider leaving your credit and debit cards at home when you’re out and give yourself a guilt-free allowance. Here are 5 ways to trick yourself into spending less.

Throwing big birthday parties

Throwing big birthday parties
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The solution: Have simpler parties, implement a “no gifts” policy or set a limit on the amount of money spent on presents (the latter is a great way to teach your children about budgeting early on).

Buying gifts for every special occasion and holiday

Buying gifts for every special occasion and holiday
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You may want to have an enjoyable Valentine’s Day, but your monthly credit card statement can take the shine out of any special occasion.

The solution: Find out what occasions are most important to you and your family, and scope out a budget that works. Once you know your budget, divide that amount by the number of paydays you have and transfer that amount every payday to a savings account. Here are some cheap and cheerful Valentine’s Day gift ideas.

Not putting money away for irregular expenditures

Not putting money away for irregular expenditures
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Car repairs, dentist appointments, haircuts, work clothes – it’s easy to forget about these expenditures, which means they’re an easy excuse to use your credit card.

The solution: Add up all of the irregular and seasonal expenses that you experience in a year. If you’re not sure, download an interactive budgeting tool. Once you have your annual total, divide by the number of paydays you have in a year and every payday, transfer that set amount into a specific savings account for these items. This is how much money you should have in your emergency fund.

Taking more than one holiday

Taking more than one holiday
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Vacations are a wonderful way to recharge your batteries, spend time with your family and discover new places, people, and cultures. There’s a time and place to use your credit, but unfortunately, vacations don’t count.

The solution: Set out a SMART goal – specific, measurable, achievable, realistic and timed – and put money aside every payday in order to achieve your vacation goal. Here are 5 travel hacks to stretch your holiday budget further.

Your home

Your home
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Home ownership can be a long-held dream, but the cost of furnishing and running one might not align with your current financial reality. If your home is simply too expensive for you to maintain, you may need to make a different decision.

The solutions:
Create a realistic budget
Look for ways to increase your income (e.g. part-time work, tenant or a roommate)
Decrease your expenses
Downsize into more affordable accommodations

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Source: RD Canada

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