Fifty-one per cent of consumers are expected to spend more than their allotted budget on holiday purchases
TORONTO, ONTARIO, December 21, 2016 – The last minute rush to the malls is a costly one for many Canadians. A new poll from CIBC says 51 per cent of shoppers are expected to go over their budget with the “extras” of the holidays.
So what are the extras? For many Canadians it’s getting caught up in the entertaining side of the holidays or travelling or not being able to resist the temptation of Boxing Day sales and New Year’s celebrations.
“The holidays can put a serious dent in your wallet if you get caught up in the moment. The reality is if you do not take a step back and budget for your holiday purchases, you may have to turn to debt to finance your holiday purchases,” says Jeffrey Schwartz, executive director, Consolidated Credit Counseling Services of Canada.
“If you go on a large last minute holiday shopping spree with your credit card you may regret your past actions in the new year. No one wants to have a debt emergency at the start of the year so do what you can now to ward off piles of credit card debt,” says Schwartz.
Unfortunately many consumers carry holiday debt from year to year without a strategy to pay it off. The CIBC poll discovered many Canadians are carrying balances and for some, they are carrying a balance for a year or more:
|7 months to a year||12%|
|1 year or more||33%|
|I don’t remember the last time my balance was zero||22%|
“I know credit card debt can be overwhelming and some consumers have resigned to the fact they will have a large credit card balance come January. It doesn’t have to be this way. If you are using your credit card to finish your last minute holiday shopping make a strategy to pay it off,” says Schwartz.
Millions of Canadians enjoy the thrill of last minute holiday shopping; anything from buying supplies for their holiday party or getting items for their winter getaway. Whatever the reason for a last minute holiday shopping spree – it can be a costly one. To keep your holiday purchases at a manageable level, Consolidated Credit Counseling Services of Canada recommends the following:
What’s your limit?
Plan how much you can spend this holiday season and stick to it. Factor in all of your holiday purchases (gifts, entertaining, travelling etc.) so you will not be caught off guard. Your holiday budget will be easier to manage once you create a plan. Cash it out
Remember when you used to open your wallet to pull out cash? And remember once your money was gone, you stopped shopping? Well it’s time to go back to basics and put your credit card away in favour of your cash. If the thought of departing with your credit card is too much to handle, charge only last minute purchases you know you can pay back.
Keep a tab
The next few days, track all of your holiday purchases and stop when you’ve spent above your budget. It is easy to spend more than you’ve planned with various holiday sales teasing you to part with your hard earned cash.
Share the load
If you are entertaining this holiday season, don’t be shy to ask your guests to bring a dish or some drinks. Every little bit helps and it will lessen the costs you have to dish out for your holiday party.
Do I need it?
Boxing Day sales are notorious for encouraging you to spend money you do not have. When you see an unbelievably good deal, ask yourself, “Do I need it?” Most of the time, you don’t! So skip the sale rack and avoid going online when Boxing Day arrives.
Need a life line?
Let’s be real, holiday shopping can be expensive and if you enjoy giving and you are not following a budget closely, you can rack up hundreds of dollars of credit card debt rather quickly. If you are scared to receive your credit card bill come January and you do not know how you can manage your growing debt, seek a trained credit counsellor. They will help you with your debt management and give you peace of mind.
About Consolidated Credit Counseling Services of Canada, Inc.:
Consolidated Credit Counseling Services of Canada is a national non-profit credit counselling organization that teaches consumers about personal finance.
For more information or to request an interview with Jeffrey Schwartz, please contact:
Natasha Carr, Community and Public Relations Manager,
Consolidated Credit Counseling Services of Canada, Inc.,
T: 416-915-7283 ext.1041, C: 416-830-4720, F: 416-915-5200, E: [email protected]