Canadians are still facing extremely turbulent financial times, with the sting from decades-high rates of inflation, coupled with rising interest rates causing monetary worries and stress across the board.
As we head into the holiday season and look to 2024, many ordinary families are concerned about how they’re going to make ends meet in January, while feeling that after the experiences of the last few years, some good cheer and optimism would be nice!
On November 21st, the government gave its fall financial update and announced its plans for the coming year.
Bank of Canada governor Tiff Macklem has warned that “on aggregate, spending plans for all levels of government over the next year would risk fuelling inflation” Mr Macklem has also called for a fiscal policy to complement monetary policy. Macklem also stated that growth in the Canadian economy is “also slowing under the weight of high interest rates, which threaten government revenues”.
Coupled with this is a warning from Robert Asselin, the senior vice president of policy at the Business Council of Canada. He has stated that the federal government does not have a “good track record when it comes to fiscal restraint”. Taking aim at the country’s Finance Minister, Chrystia Freeland he said that “Unfortunately, in the past, every time Minister Freeland said ‘fiscal restraint,’ she has come up with huge spending.”
Ordinary Canadians are worried about the cost of living, and the imminent threat of a recession, despite the fact it has so far yet to materialise.
Given all this, what practical steps can be taken to ensure that you can enjoy the holiday season, but go into the new year with a relatively clean bill of financial health and perhaps even some savings in the bank?
We’ve got together with some finance experts to get their knowledge and know-how on how the make the end of 2023 and the start of 2024 monetarily much healthier for you.
What are some great tips to get you in good financial shape during January?
“Addressing holiday overspending, rising prices due to inflation and the approaching tax season should be top priority, advise CPAs
There are a few ways to deal with holiday debt. You can find new sources of income, cut back on spending and establish a realistic debt payment plan or use your savings (which experts say you should try not to do).” Sophie Nicholls-Jones writing for Chartered Professional Accountants Canada
Is it possible to do a ‘no spend’ month as we turn the corner into the new year?
“Personal finance author Melissa Leong has a lofty New Year’s resolution: a moratorium on buying extras for 21 days in January. Think of it as Dry January, but for spending, she says.
“A spending freeze is kind of like a cleanse,” Leong told Global News in an interview. “You’re resetting your habits so that you can figure out what you truly value and maybe start some new habits going forward.” Leong is not alone in making money-focused resolutions for the new year. According to an Ipsos poll conducted exclusively for Global News, 41 per cent of Canadians said they plan to make financial resolutions for the New Year. Forty-eight per cent said they will aim to pay off debt while 45 per cent want to make and stick to a budget.” Anne Gaviola writing for Global News Canada
Do we need to look backwards to move forwards with our new year finances?
“Review the past year and set action points! The most important part of moving forward is looking back. Start by reviewing the last year from a financial perspective, working through what went well, what progress you made, and any relevant context to bring meaning to what happened. Then think about things that didn’t go so well, and the relevant context there — for example, did you lose hours at work, or did you have a period of time without a full-time income? All of that context is important for understanding what you have to work with. You might want to journal out your thoughts and feelings about money to release any baggage you’re carrying, or you might want to do a more strategic audit that focuses more on the numerical changes to your financial situation.” Emma Edwards writing for PocketSmith