2017: Time to break your bad money habits

New year, new you? Sometake the opportunity of the calendar turning to turn a new page in their personal books losing weight and getting our financial house in order top many lists.

When it comes to money, there are several common mistakes people make, according to ShannonMcNutt, an associate consultant with Investors Group in Charlottetown.

Some of you also shared your bad habits via Twitter and Facebookalong with how you plan to try to change them.

1.) Not saving

"Number one that we hear all the time is 'I don't have any money to save,'" saidMcNutt.

You really have to have an emergency fund. Shannon McNutt, financial advisor

"We can usually find some unallocated cash somewhere that people don't realize they're spending," she said.

Put aside the money you spend on take-out coffee or eating out and stash it in a savings account,McNuttsuggests. Simple but not necessarily easy.

"You have to make it a priority nobody can really live off CPP or OAS, the two things you get from working in Canada."

2.) Over-spending

People aren't saving, or not saving enough, because they are overspending, saidMcNutt livingpaycheque-to-paychequewithout knowing how much they are spending.

"Better planning and a little more awareness of your own financial situation maybe could resolve that ...for many people."

Enjoy your life, she advises, but build a budget. People tend to overspend on their kids in particular, she notes.

"It's daunting when you first start," she said. Write down each time you buy something for at least a couple of months so you can see where your money goes. Remember to figure in annual expenses like property taxes or home and vehicle insurance premiums and professional dues anddivide them into monthly sums.

There are some niftyappsnow that can track your spending via Facebook, Elyse J. R. Cottrellsuggested the freeapp Mint. Some banks will also categorize your spending on your debit or credit cards for you, giving you a snapshot of whereyour money went.

• Personal finance apps to help you shop, plan and save

"People do the calorie-counting or steps,"McNutt saidpeople can do the same with their financial wellbeing, and "make it a habit... it can be pretty empowering."

3.) No emergency fund

"You really have to have an emergency fund," she said. This is in case of job loss or illness, and should be separate from your retirement savings.

"They say about three months of living expenses, some people go up to six months," saidMcNutt. Figure in rent/mortgage, food, utilities, insurance, and vehicle expenses.

4.) Waiting to invest in retirement

The earlier in your lifetime you can begin to save or invest, the more the interest will compound year after year, saidMcNutt.

"Even if its $25 every two weeks, that $25 with an interest rate even at five per cent it's going to be able to double many times over by thetimeyou retire," she said.

People are nervous about investing and not knowing the markets, she said that's where the services of a professional can help, she said.

Young people have time to invest moreaggressivelybecause the markets will always recover, she said if you don't earn at least two per cent on your money, then inflation means you are losing buying power.

"It would be nice if high school students understood this, and understood what their options were,"McNuttsaid.

5.) Credit card debt

Want to earn points or miles for travel that many cards offer? Go for it,McNuttsaid but remember, "credit cards can be really high-interest," most at just under 20 per cent.

Canadians right now are living with morehousehold debt than ever,McNuttsaid, which is a concern.

• Canadian key household debt ratio hits record high

"You have to be very diligent about paying it off," or the interest you pay will quickly outweigh the benefits of having the points, she said.

"Our interest rates are really reasonable right now, but if those jump a couple percentage, some people will find it very difficult to pay even the interest they have on these credit lines."

6.)Underspending

This may not be a "problem,"McNuttsaid, but she does see clients who have saved diligently their whole lives and in their retirement are reluctant to part with their hard-earned money.

"Even though they might have enough to live a really great life and to really enjoy themselves they're just really concerned about running out of money. We see it quite often," she said.

Sitting down with a financial planner to help you calculate your living expenses versus your government and other pensions can help you decide how much to spend from your retirement savings, saidMcNutt.

"A lot of people have worked very, very hard for this money and they should really be enjoying it," she said.

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