How to Budget for the Holidays When You Have Debt

December 4, 2018 - 9:24am

Getting caught up in the holiday spirit is easy to do — you can’t walk into a coffee shop or turn on the radio without encountering signs of the season. For Canadians living with heavy debt, the holidays present some real challenges.

Getting caught up in the holiday spirit can mean overspending, which can inevitably lead to more debt. According to a 2017 pre-holiday spending survey from CIBC, almost two-thirds of Canadians felt that their holiday spending was out of control. About half (52 per cent) predicted they would exceed their holiday budget.

Accumulating additional debt during the holidays is not a good idea, especially if you are trying to pay off an existing debt load. The question is, how do you find balance between your desire to enjoy the holidays and your need to avoid additional debt?

First, create a holiday budget

It is no secret that December is a month that many people open their pocketbooks in earnest, but if you are trying to stay within a household budget as part of your debt repayment strategy, you need to plan ahead.

Start by creating a list of all your expected holiday expenses: gifts, wrapping, outfits, food, travel, entertaining, even the extra gas required to go shopping. This online holiday budget calculator  helps you see everything in one place and helps you determine what you can afford to spend.

Next, find simple ways to rein in holiday spending

The goal is to keep everything within your household budget. For example, plan your weekday meals in December to avoid the extra expense of take-out. Combine multiple shopping trips to save gas. Make a list before you shop, and remember to track your holiday spending. Small changes like these can make a huge difference.

Beginning with a plan to stay within your household budget can help you stick to your debt repayment goals as you begin the new year. Keep a positive attitude, avoid pitfalls, and you can still have a happy holiday season — even on a budget.

Do you have tips for sticking to a budget during the holiday season? Share your ideas on Twitter using the hashtags #LeaveDebtBehind and #HolidayDebt.

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

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