After the Holidays, Trim the Fat... From Your Budget

After the Holidays, Trim the Fat... From Your Budget 
- One in ten Canadians are expected to carry debt following holiday
season purchases according to the 2012 BMO Holiday Spending Outlook 
TORONTO, ONTARIO -- (Marketwire) -- 12/27/12 -- While some people try
to shed a few pounds gained over the holidays, Canadians should also
start the New Year making sound financial resolutions. 
According to the 2012 BMO Holiday Spending Outlook, 12 per cent of
Canadians planned to borrow during this period and indicated that
this is the only time of the year where they spend beyond their
means. Over a third of these people (37 per cent) believed they could
catch up during the New Year, while more than half thought they would
have a remaining debt. 
Su McVey, Vice President, BMO Bank of Montreal, reminds Canadians of
the various strategies and tools available to help them better plan
their budget in 2013, shorten the payment of debts associated with
holiday season purchases and avoid such a recurrence next year. 
"It is important for each of us to evaluate our financial situation
after the holidays and take advantage of online resources to ensure
closer monitoring of our discretionary spending and take appropriate
resolutions," said Ms. McVey. "For example, BMO MoneyLogic is a tool
for managing personal finances that is available online, and enables
customers to develop budgets and establish spending limits to help
minimize expenses." 
BMO offers the following financial advice to consumers wishing to
restore their financial situation following the frenzy of holiday
season shopping: 
Reduce discretionary expenses by bringing your lunch to work: 
Buying a coffee en route to work or eating every lunch at a
restaurant can be expensive. If you set aside the $10 you spend every
day with your meal and your coffee, you could save $2,600 each year.
Even if you bring your lunch four days a week and eat at the
restaurant on Friday, you still save $2,080 per year. 
Space your payments to avoid liquidity problems: 
In order not to lose track of your recurring payments, try to stagger
them so that you do not have to pay a significant amount each time.
This will leave a little air to breathe, and avoid having liquidity
problems for your daily expenses. 
Taxes: If your municipali
ty allows it, pay your taxes by monthly or
quarterly installments. 
Insurance premiums: Consider making the payment of insurance premiums
over 12 months. 
RRSPs: It is possible to contribute to RRSPs throughout the year. Do
not hesitate to choose a direct debit option, which will remove a
pre-determined amount on each of your paycheques to contribute to
your RRSP. 
Tax Free Savings Account (TFSA): When you contribute to your TFSA,
investing small amounts at regular intervals is better. Over time,
even small contributions of $50 or $100 will eventually accumulate. 
Develop a financial plan including an emergency fund: 
Planning an emergency fund can help ensure that you will be able to
cope with unexpected expenses in the future, and will not have to
incur debt. The general rule is to set aside the equivalent of three
to six months of your income so you can use it in case of unexpected
expenses. Currently the BMO Smart Saver account offers a 1.2 per cent
interest rate - the highest rate offered among Canada's major
financial institutions for a full-service savings account without
minimum balance requirements. 
Many Canadians establish a budget and a financial plan to manage
their daily finances and their savings goals. However, unexpected
expenses such as budget overrun for purchases during the holiday
season may leave you short of money.  
Use a line of credit to consolidate your debt and save on interest
costs to free you from your debt faster: 
More than ever, households are looking for ways to reduce costs and
save money. By consolidating their higher-interest debt into a single
monthly payment with a low-interest rate such as a BMO Personal Line
of Credit, Canadians can reduce their interest charges and repay
their debt substantially faster. 
About BMO Financial Group  
Established in 1817 as Bank of Montreal, BMO Financial Group is a
highly diversified North American financial services organization.
With total assets of $525 billion as at October 31, 2012, and more
than 46,000 employees, BMO Financial Group provides a broad range of
retail banking, wealth management and investment banking products and
The survey results cited in the 2012 BMO Holiday Spending Outlook
conducted by Pollara are compiled from a random sample of 1,000
Canadians 18 years of age and over between October 11 and October 16,
2012. A probability sample of this size would yield results accurate
to +/- 3.1 per cent, 19 times out of 20.
Media Contacts:
Matt Duffin, Toronto
(416) 867-3996 
Lise Lapointe, Montreal
(514) 877-7251 
Laurie Grant, Vancouver
(604) 665-7596 
Twitter: @BMOmedia
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