Christmas Budget Tips

Nov 12, 2019

4 Ways to Afford the Holidays in 2019

The holidays are coming up quickly, and while for most people this is a time of year that brings joy, it can also cause anxiety for those struggling financially. According to a report by Manulife Financial, 60% of Canadians surveyed are willing to put themselves into debt to buy holiday gifts. The majority of respondents admitted they don’t have a budget going into the Christmas shopping season, so it’s no surprise that 1 in 2 Canadians will go into debt, putting their holiday purchases on credit and paying more in the long run. 25% of those surveyed said their holiday spending has an impact on their health, but obviously the impact isn’t enough to stop them from spending money they don’t have.

Experts suggest that social media has increased pressure to purchase; we’re bombarded with advertising that entices us to spend while watching our peers maintain a certain lifestyle, one that seems out of reach-until you reach for your credit card. Online shopping makes it easy to add purchases to your mounting debt and in-store offers such as “buy now pay later” make it easy to access new cards and making it hard to keep track of the bills as they add up.

 The truth is, what we see on social media comes at the cost of servicing a large amount of consumer debt.  Canadians owe and many of them experience a severe holiday spending hangover as we see increases of visits to our office once the credit card bills hit in January. What you don’t see is that people often regret their purchases, with 86% of people surveyed by Nerd Wallet.

How can you enjoy the holiday season without the financial stress? It starts with an honest look at your cashflow, and planning for it throughout the year. Here’s four tips on how to make the holidays more affordable:

1.       Create a Budget

This is by far the most important step to shopping without debt over the holiday season. If you’re already in debt, it may be tempting to go into the holiday season without a budget and continue to add to your credit card statements but think twice before charging all those gifts. Compounded interest means that you may end up paying a premium to make the purchase on credit now instead of paying cash later. Here are 3 things you should consider when making a budget for the Christmas holidays:

  • Christmas budgeting isn’t just about gifts, there’s also parties, donations, and baking that happen all at the same time. Think about all the extra items that have come up in the past, from holiday hairstyles and outfits to hosting dinners and travel.
  • Don’t feel pressured to maintain events that you can’t afford and know there are alternatives. Potlucks are always an affordable option to bring people together.
    Many people find the envelope cash system an effective way to control their holiday spending.
  • Make a list of people and a few items you might want to buy for them.
  • Instead of buying individual gifts, get a board game, movie night package, gift card to attraction like the zoo for a group.

2.       Save Throughout the Year

Without fail, holiday celebrations happen every year, which gives us an opportunity to plan ahead and prepare ourselves financially. Many people start the year off with increased debt levels from their previous holiday purchases, so you’ll want to start out with a comprehensive budget that accounts for all your spending, including gifts.

3.       Get Creative with Gifts

  • Make Homemade Gifts: Check out pinterest or homemaking blogs for do it yourself gifts. It’s easy to whip up a batch of homemade body scrubs with coffee or sugar or a mason jar cookie recipe that makes a cute, homemade gift.
  • Re-Gift: If you have anything you’ve received that was put in a closet and forgotten, consider re-gifting it.
  • Points Cards: Now is the time to cash in on those points cards! You can also see if stores offer chances to earn more points on special shopping days.
  • Saving Apps: There are different ways you can use apps to save money, here’s 5 different shopping apps for Canadian consumers to look at (https://www.everythingzoomer.com/money/2018/05/23/5-shopping-apps/)
  • Marketplace and Re-Sale: Consider buying things second hand.

4.       Look for Free Events

Chances are that your area has lots of holiday events going on for you to partake in, from Christmas light tours, parades, and Santa visits around your community. This would be an excellent time to take the opportunity to volunteer at a drop-in centre or soup kitchen.

No matter how much debt you carry, chances are we can all afford to reduce our spending over the holiday season. Statistically speaking, many people are struggling with their debt and the holidays only increases the mounting pressure. Keep in mind that making memories should be your focus, not the money spent or the number of gifts, and you’ll avoid the guilt that comes with a holiday spending hangover.