TORONTO, Dec. 29 /CNW/ - With holiday shopping and gift giving behind us
and the New Year just ahead, now is the perfect time for people to take stock
of their financial situation. While current economic conditions are
challenging many Canadians to re-think their budget, Scotiabank has some
practical suggestions to help households shore up their financial position.1. Don't panic or make emotional decisions. One way to avoid the trap of
       leaping before you look and making financial or investment decisions
       you'll regret in the long run, is to manage stress by paying attention
       to your physical and emotional fitness. If you don't have a financial
       plan, now is the time to get one that emphasizes debt management and
       maps out your short and long term goals. Focusing on those goals will
       help you maintain perspective.

    2. Pay down debt. Start by tackling consumer debt such as higher rate
       department store and other credit cards. Inform yourself about
       interest rates and options, such as a consolidation loan, that will
       help you free up cash for other priorities such as investing or paying
       down your mortgage.

    3. Reduce your discretionary spending so you can redirect more money to
       debt repayment or savings. Review your household budget to track how
       much money is coming in, what your fixed expenses are and identify
       things you're spending money on that you could live without. For
       example, pack your lunch rather than eating out every day, cut back on
       magazine subscriptions or visit the library more often rather than
       buying books all the time. Then consider setting up an automatic
       savings plan so that the money you're saving comes straight out of
       your bank account. Before long, chances are you won't even miss it.

    4. Make an RRSP contribution and then use your refund to help manage
       competing financial priorities. The refund could be used to pay down
       high cost debt, make an extra mortgage payment, open a new Tax-Free
       Savings Account (TFSA) or contribute to your child's Registered
       Education Savings Plan (RESP). Borrowing to make an RRSP contribution
       makes good fiscal sense if you are confident that you can pay the loan
       back relatively quickly.

    5. Position your investment portfolio for recovery - but diversify to
       manage risk. Remember that when markets are down, there are investment
       opportunities that can potentially benefit your portfolio in the long
       term. Be diversified with an appropriate mix of asset classes (equity,
       bonds and cash equivalents) that fit your risk tolerance, investment
       time horizon and income requirements. Stay in regular contact with
       your financial advisor to ensure your portfolio is appropriately
       balanced to meet your needs, manage risk, and to offset market
       fluctuations.For more information on ways to get the upper hand on your finances,
check out www.findthemoney.scotiabank.com or visit your local Scotiabank
branch.