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TORONTO, ONTARIO--(Marketwire - Dec. 27, 2012) - 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 municipality 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 solutions.

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.