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:
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
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.