5 Tips to Avoid the Holiday Debt Trap

Why do we spend so much at Christmas?

Every year we say we’ll exercise financial restraint and stick to our holiday budget, but the purchases pile up, and we find ourselves further in debt come January.

Sometimes it’s that nagging feeling that we haven’t spent enough on someone special, or we’ve left the Christmas shopping to the last minute and overcompensate by choosing a lavish gift.

The holidays are a common holiday debt trap. And the numbers show that Canadians are preparing to spend their way through the holidays even more generously this year. According to a study by PWC Canada, the average Canadian consumer will spend $1,563 this holiday season—an increase of 3.7 per cent over last year.

If you’re in a strong financial position and you enjoy spoiling family and friends over the holidays, this is probably your favourite time of year. But if you’re trying to avoid a holiday hangover, we have five tips to help you avoid the annual spending frenzy.

1: Make a realistic budget and stick to it.

Yes, you’ve read this in every news story, magazine and financial blog. It’s a cliché because it’s true. A budget is critical. How much have you saved in the months leading up to Christmas, and how much can you comfortably afford to spend?

The reality of your budget may demand that you make some uncomfortable choices this year. The truth is that you need to look after your own wellbeing. If you’re stressed about holiday debt, you probably won’t enjoy the holidays anyway, and you’ll be facing added stress in the new year after the festive season is over.

Figure out what you can spend, and focus on the people and events that are most important to you. Impossible? Hey, we’re just getting started.

2: Share an experience.

We’re extremely fortunate to live in a society in which most people have everything they need. Even the young people on your gift list probably have more toys and gadgets than they actually play with. The bottom line is this: most people don’t need more ‘stuff’.

Is your child an animal lover? Take them to an animal shelter and volunteer to walk the dogs or play with the cats. You can even wrap up some treats for your new furry friends.

Outings such as waterparks, go-carting, rock climbing and skiing provide fun for the whole family. Spend quality time together and create memories that will last a lifetime.

3: Give gifts that are needed.

A gift that is needed is highly valued and shows extra thoughtfulness. Keep your ears open as Christmas approaches and make a note when someone on your list says, “I really need a….” It’s the perfect opportunity to buy a gift that will be treasured—provided that it fits within your budget, of course.

4: Make or bake your gifts.

Time is a very valuable commodity these days. When you give someone a homemade gift, such as art, a craft or baked goods, it shows how much you value your relationship with that person. If you have a creative talent, give a gift from the heart that is both meaningful and budget friendly.

5: Get back to the spirit of Christmas.

Over the decades, Christmas has evolved into a major retail event, but it’s still the time spent together that people remember most.

Instead of buying gifts for friends and office mates, why not host a potluck movie evening over the holidays? If someone has a place in the country, invite the family for an evening bonfire or sleigh ride with carols and hot chocolate. This time of year can be wonderful even without gifts.

Make this the year you turn things around

When the thrill you get from buying an expensive gift doesn’t last as long as the stress of overwhelming bills, it’s time to look for a new way to tell loved ones that you care.

If you’re going into this holiday season already burdened with debt and knowing you’ll be deeper in debt when it’s over, you’re not alone. The good news is there are options available that can eliminate your debt, protect you from creditors and give you back your peace of mind.

It all starts by booking a consultation with one of Faber’s Licensed Insolvency Trustees. There’s no charge and no judgment, and it’s totally confidential. We’ll assess your situation and provide strategies such as debt restructuring, a consumer proposal or personal bankruptcy.

Contact us today to book your appointment. We want you to have fond memories of Christmas 2018 and look forward to a brighter financial future in the new year.