By Jasmin Brown - Licensed Insolvency Trustee

BDO First Call Debt Solutions

How to stick to your debt reduction goals, even during the holiday season

Dec 10, 2019 | 12:46 PM

Managing your debt load during the holiday season can seem daunting. As holiday spending kicks into high gear, it is tempting to put debt reduction goals on the backburner. However, even considering all of the extra expenses this month will bring, it is possible to stick to your debt reduction plan and avoid adding to your debt.

A new holiday survey from CPA Canada reveals that the majority of Canadians (67%) don’t plan on overspending during the holidays. That’s good news. What is concerning is that almost two-thirds (64%) of Canadians don’t put savings aside during the course of the year for holiday spending.

A significant number of Saskatchewan families are struggling financially. When money is tight and there are no readily available funds, it can be tempting to rely on credit cards or other forms of credit to cover costs. The resulting holiday debt can sometimes take months to repay, putting additional strain on already stressed family finances.

Don’t abandon your monthly budget

The tool that has helped you stay on track all year remains your most important tool to help with debt during the holiday season. The strategy is to make sure that you still have room in your December budget for your regular debt payments even though you will have extra holiday expenses.

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This holiday budget calculator can help. As you are creating your holiday budget, remember that it is important to be realistic. Include all potential costs, from holiday clothing and groceries for Christmas dinner to gift wrap and baking supplies. Now, ask yourself: What can I really afford to spend this holiday season? Once you have figured out a dollar amount, make a promise to yourself to stick to it.

Leave your credit cards at home

You’ve built a thorough, realistic holiday budget. Use that information to your benefit by withdrawing cash or using your debit card for holiday purchases. Why cash instead of credit? Parting with cash or paying with a debit card tends to lead to more mindful spending. You will likely take time to consider each purchase, and keep closer track of your spending. If you need to make a few online purchases, just be sure you are able to cover those charges on your credit cards within one or two months to avoid accumulating interest charges.

Look for no-cost or low-cost family activities

The holidays tend to mean more time off for kids and parents, which can put a financial strain on your wallet. A trip to the movies for a family of four can easily cost over $100 once you factor in tickets and snacks. Are you looking for ways to keep everyone occupied? Look for activities that are low cost or free.

Start your search with your local community guide. Free ice skating, swimming or other family activities are often available. Spending less on activities can help you stick to your debt payment plan — even in December.

Don’t put off getting debt help

Depending on your financial situation, you may not want to wait until the holiday season is over to find a debt solution. The stress of debt can amplify the stress of the Christmas season. Getting help with your debt early can provide peace of mind. A Licensed Insolvency Trustee can advise you about debt help options.

The holiday rush has arrived but that doesn’t mean you have to reduce your efforts to pay down your debt. Managing your existing debt load and avoiding new debt is possible! If you have a solid spending plan ahead of time, there is a very good chance you will be able to make lasting memories and stick to your debt reduction goals.

Join us on Twitter and Facebook and share your ideas for no-cost and low-cost family fun during the holiday season. #LeaveDebtBehind