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02/18/2014 06:12 EST | Updated 04/21/2014 05:59 EDT

How to Cure the Holiday Financial Hangover

Have you noticed that every holiday season, the pressure builds as everyone rushes around buying too much stuff before the Big Day? Then our festive bubble bursts just after New Year's when they announce how much new debt everyone has incurred. And then just as suddenly, the talk turns to RSPs and taxes. The collective anxiety is enough to give everyone a massive ulcer.

What, me worry? How to avoid the holiday financial hangover, worry and dread in four steps

Have you noticed that every holiday season, the pressure builds as everyone rushes around buying too much stuff before the Big Day? Then our festive bubble bursts just after New Year's when they announce how much new debt everyone has incurred. And then just as suddenly, the talk turns to RRSPs and taxes. The collective anxiety is enough to give everyone a massive ulcer.

Ok, you can exhale now. Shaun Darchiville, an investment adviser with Desjardins Wealth Management Securities Inc. says that all this can be avoided. His advice is to realign your financial situation with a five-step holistic or 360-degree approach that takes into consideration every part of your life.

Step 1: Take stock of your financial situation

Shaun suggests that each December we all turn into absent-minded spending zombies as if we've been hypnotized by the twinkling lights and tinsel. And then we spend the rest of the year trying to pay off these expenses before the cycle begins again. He suggests that we need to adopt the magic phrase that's been absent from our lives for years: I can't afford this right now. "By getting in the habit of saying those six words, you will eliminate your annual post-holiday anxiety," he says. To start, take stock of your financial situation right now: look at what you have in your accounts, what debts do you owe and what's coming up in terms of family and social obligations that will require you to spend some money. Next, with this information, create a simple monthly budget. Use line items like: rent/mortgage, loans, groceries, entertainment, utilities, debt, future savings and emergency savings. If you feel like there isn't enough wiggle room for the savings items, track your spending for a month to see where your money is going. This way you can find some extra by identifying those areas that can be cut back or eliminated. Now that your simple budget is done, stick to it. The urge to splurge will nag at you, Shaun says "It's better to say 'no,' instead of chasing that elusive dream of the 'good life.'" The money you'll end up saving can be put towards your debt and your retirement savings.

Step 2: Invest in yourself with a health plan

Shaun says that a health plan takes into consideration your current health and your family medical history. He believes the latter has a direct effect on the former. In other words, your parents' good or bad habits will also influence you. Knowing your health history can help you adopt better habits now so you'll live better and hopefully avoid increased medical expenses later.

Step 3: Create a fitness and mobility plan

While often confused with the health plan, this one considers exercise and diet. "In fact," says Shaun, "You can be healthy but not mobile. Neither is mutually exclusive." To start your fitness and mobility plan, think about how you want to be next year, in 5 years, in 20 years and into retirement. Then start taking the steps towards living more actively and cleanly by exercising, eating well and adopting other preventative habits will help you live longer. And the best part: these good habits don't have to hurt your new budget. A walk or meditating to one of your favourite CDs is priceless.

Step 4: Your lifestyle plan cultivates your mind

Shaun suggests that similar to the fitness plan, which focuses on your physical, the lifestyle plan strengthens your mind. The object is to cultivate personal interests, hobbies, interests and other good deeds that get you out in society. Maybe you love coaching sports to kids or leading pottery classes to adults, these kinds of activities keep your mind sharp and give you purpose.

"When you feel purposeful, you won't need to fill in the gap with a fancy new toy, a pair of new shoes or a few pints," says Shaun."You will feel fulfilled by the social joys of sharing your gifts with others. And once again, it doesn't have to cost a lot! Who knows, you might even be lucky enough to earn a pay cheque." Another great residual, he continues, is that you can carry these hobbies into your retirement years, which will help you live longer too.

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