Newspaper article The Canadian Press

Spendthrifts Should Forget about Budgets and Try Little Things to Cut Spending

Newspaper article The Canadian Press

Spendthrifts Should Forget about Budgets and Try Little Things to Cut Spending

Article excerpt

Spendthrifts should forget about budgets

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MONTREAL - Starting the New Year broke and in debt?

If you're beyond budgeting, trying to cut back on spending in small ways may work best, say experts who offer simple tips on saving.

Credit counsellor Margaret Johnson says budgets don't work for spendthrifts.

"They start off with the best of intentions, but the reality is no, they don't work," said Johnson, president of Solutions Credit Counselling Canada in Surrey, B.C.

Here is a list of tips that cover credit cards, spending, shopping and hanging on to spare change.

Credit cards: Johnson suggests getting a credit card that gives you cash back rather than points, saying the money is more useful.

For those with credit card debt, make two payments every month that are tied to when you get paid to cut down on interest charges, she added. Also know how much interest you are paying.

"Most people don't pay their credit cards in full," she noted.

Cash: The Penniless Parenting blog says spendthrifts should use cash as much as possible and recommends carrying around a $50 or a $100 bill. See how long that bill can last without being broken.

"Do I really want to break a $100 bill?" says the blog's author, who is only known as Penny.

Penny also recommends waiting 24 hours before buying anything that costs more than $100 and having a "buddy" -- a spouse, partner or friend -- you can call before spending $50 or more.

She also recommends that spendthrifts avoid window shopping or malls and other "problem spots" for spending.

"Just don't go there. Change your route."

Johnson adds that couples can give each other a weekly "allowance," or if one half of the couple has trouble with spending, he or she can get a weekly amount.

Household debt is a problem and Canadians have been borrowing like never before with help from low interest rates. Statistics Canada recently said the household debt to income ratio has risen to a record high of 164.6 per cent.

Smart shopping: Fashion blogger Marta Tryshak notes shopping must not take priority over essentials for big spenders.

"You shouldn't be compromising your heat over a new bag," said Tryshak, creator of the blog withlovegabrielle. …

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