Don’t let debt be part of your holiday plans
Money is always tight through the holiday season, but a new survey reveals that many Canadians feel pressured to spend beyond their means for the sake of the season. And although respondents indicated that they plan to spend less than last year, many are accepting a holiday spending hangover as a reality of the season.
According to the CIBC Holiday Spending Poll:
- Canadians plan to spend on average $600 this season, which is a drop of 8 per cent from last year
- More than half (51 per cent) anticipate blowing their budget
- 13 per cent already know that they are going to feel guilty about going over budget when the bills arrive in January
- How do we handle those holiday bills? 13 per cent pay in cash; 57 per cent use credit, but plan to pay off the balance in full before it comes due, while almost a third anticipate carrying their debt balance (and that accruing interest) forward.
- Millennials take note: compared to other generations, more millennials plan to overspend and carry debt after the holidays
- There is truth to the saying that the more you make , the more you spend: 52 per cent of respondents with higher incomes exceed their holiday budget
“This survey indicates that many Canadians have resigned themselves to the fact that debt is simply a part of celebrating the holidays. Despite admitting that they are going to feel guilty about it, they proceed with their spending and are using debt as a means to an end,” says Jeff Schwartz, Executive Director, Consolidated Credit Counseling Services of Canada.
“You have the opportunity while you’re planning your holiday celebrations to put some smart shopping into play and avoid the guilt (and the extra interest charges) of a holiday debt hangover,” says Schwartz.
Give yourself a gift this holiday season: a chance to start the New Year with no or very low debt.
Think budget, not gift list
You want to avoid a holiday hangover? The very first (and most important) item on your gift list should be your budget. Without a budget you can’t pinpoint how much you can afford and will create an environment in which you’ll spend beyond your means.
Make sure that your budget is in cash only. Don’t use your credit cards as a way to extend your household budget. It’s borrowed money that comes at a cost in January.
Once you’ve decided how much you can reasonably afford, you may realize that you’ve got to cut back. Look for ways to still be able to celebrate the season with friends and family without the pain of debt. What about drawing names instead of each person in the family buying gifts for each other? How about DIY gifts or offering your help or services instead of buying something?
If you’re hitting the stores, make sure you monitor sales and price match wherever you can. Shop when you’ve got lots of time so you don’t give in to impulse spending because you’re rushed.
If you’re shopping online, make sure to read the fine print and buy well in advance so you can take advantage of free shipping.
Resist the pressure
Take time this holiday season to reflect about what really matters most to you: your friends, family and your health. None of that has to do with extravagant gifts. Changing your attitude towards celebrating the holidays may be all you need to stay out of debt.