Avoiding Holiday Debt Hangover

November 24, 2017 - 12:48pm

“It’s more blessed to give than to receive,” runs the old saying. Unfortunately, for some people this is the time of year when their gift to themselves is a serious debt load from all the generosity and festivities. The result can be a budget hangover in January, when all the credit card bills come due.  To avoid accumulating tons of debt over the holidays below are a few suggestions to consider.

This is the time of year when we all want to demonstrate our thoughts and appreciation to family and friends by giving them a gift. However, we all need to remember that the spirit of the Christmas season is one of thoughtfulness and caring, and can be shown in ways that do not place a financial burden on you.  It may be as simple as sending a greeting card with a personal message, or sharing a gift of homemade baking.

Look for ways to make your own gifts. Search the internet or your local library for information on craft projects you can make.  For friends, you could make up your own “gift certificates” for services you can perform, such as washing a friend’s car once a month, yard-work, or babysitting. The time and effort you invest in creating or doing something for a family member or friend may be appreciated as much or even more than an expensive gift.

Other tips: decide ahead of time, a few basic holiday spending rules.  These might include “no credit cards, cash only,” “no impulse purchases,” and “shop with a list, and stick to it.” Resolve to avoid those seductive “no money down, no interest for XX months!” offers from retailers.

And, it’s never too early to think about next year! Prepare well in advance and decide how much you’d like to spend in 2018. How many gifts will you purchase? How much for each gift?  What will you spend on entertaining, dining out, decorating, and other expenses? Once you’ve arrived at a reasonable budget, set aside money regularly for your “2018 Holiday Fund.”  When the holidays arrive next year, you’ll be able to spend up to your limit with a good conscience, and start the New Year without a financial disaster.

The bottom line is to have a festive season filled with family, friends, and fun while avoiding that debt hangover that we all dread when the New Year arrives.  By planning your holiday season with these tips in mind you will end up giving yourself the best Christmas gift of all - a debt-free start to the New Year.

Debt Solutions
By Jasmin Calyniuk Licensed Insolvency Trustee, BDO Canada Limited

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