A new year is here, and with it comes a new chance to do things right when it comes to your finances.

For many of us, a few pointers on budgeting couldn't come at a better time. According to Statistics Canada, the ratio of Canadians' household credit debt to disposable income reached an all-time high: 163.7 per cent.

CBC Kitchener-Waterloo spoke to Heather Cudmore, who does credit counselling with Mosaic counselling and family services, a counselling agency based in Kitchener. Here is a synopsis of some of her tips to keep your budget on track in 2014.

  1. Start saving for Christmas in January. Put away a bit each month, beginning in January, says Cudmore. That way you have cash on hand to buy Christmas presents, instead of relying on credit.
  2. Evaluate your expenses. Look at how much you spend on recurring everyday expenses like coffee and lunch. How much does that actually add up to in a month? A $5 a day coffee habit adds up to $100 a month. Spending $10 a day on lunch: $200. Are there other things you would like to do with that money, like go on a vacation? 
  3. Cut down on the cards. Make a New Year's resolution to get down to one or two credit cards, preferably with 8 or 9 per cent interest.
  4. Think small. Don't try to draft a budget for a full year; it's too daunting. Start by budgeting for each pay period. That way if you go over one week, the long-term budget doesn't have to be scrapped. 
  5. Hide your money from yourself. Look at getting a bank account that allows you to have multiple accounts for little or no extra cost at a low-fee bank. That way you can tuck away money for Christmas or car repairs that you can't access from a debit machine. That will protect them from impulse purchases.
  6. Channel Martha Stewart. Reduce what you spend on groceries by cooking from scratch instead of consuming processed foods. A whole chicken costs much less than skinless, boneless chicken breasts. 
  7. Pay down debts using the 'debt triangle'. Debts with high interest rates are at the top, while those with low interest rates at the bottom. For example, store cards with interest rates upwards of 30 per cent would be at the top, while MasterCard or Visa, at nine to 18 per cent would be closer to the bottom. When you are paying down your debt, make minimum payments to those at the bottom of the triangle and put as much as you can to the high-interest debts at the top. 
  8. Don't procrastinate with creditors. It's easier to negotiate with them than you may think. Offer creditors some kind of payment. Odds are they are going to take it. "The worst they will say is no, I don't want $20, I want $50. But you can still pay what you can afford," suggests Cudmore. "Waiting and waiting and not opening your mail, not facing it doesn't make it go away. It just delays it, and a lot of people are surprised when they contact their creditors how willing they are to work with them."