The winter holidays are here, which means you’re going to spend a whack of money by the time the new year hits. After buying food, drinks, decorations, event tickets and countless presents, you’ll be lucky to have a $5 bill crumpled at the bottom of your wallet. Find out how to recover from holiday debt and how you can avoid overspending the next time around.
The Pressures of Holiday Spending
People spend an average of $1,706 on winter holiday expenses like travel, food and presents — this doesn’t even include their monthly needs like utility bills and housing. Unless you’re a high-income earner with few debts or responsibilities to worry about, dropping an extra seventeen-hundred dollars in a few weeks is going to have a massive impact on your bank account, especially if you’re living paycheque-to-paycheque or struggling with debt.
What to Do If You’ve Gone into Holiday Debt
If you’re overwhelmed, you should visit a licensed insolvency trustee. They offer services like credit counselling, budgeting and debt management. These can help you slowly make the payments and get back to normal. If you need some serious relief, they can explain what is personal bankruptcy and what is a consumer proposal — these are the two most effective options that you can turn to as a last resort.
How to Stop Yourself from Overspending
Make a Budget
It’s better to set a money-saving goal now than a debt-paying resolution on New Year’s Day. Before you throw yourself into the frenzy of holiday shopping, set yourself a budget. Give yourself a safe amount that won’t impact any of your monthly needs like rent, bills and groceries. Ignore the pressures of consumer spending and stick to that amount.
One effective way to save money during the holidays is to get creative and make presents instead of buying them. For instance, if you’re skilled in the kitchen, give out tins of freshly-baked chocolate chip cookies or jars of homemade jam. A thoughtful gift is better than an expensive one.
Trim Your Gift List
You don’t have to buy something for your neighbours, your coworkers and acquaintances. Of course, you’re going to go broke if you push yourself to spend money on everyone you know. Shrink your list so that it includes close friends and family. Everyone else will be happy with a card.
Don’t Use Your Credit
It will be tempting to put everything on your card, but you should stick with cash. Credit is borrowed money that you have to pay back later with interest. Don’t saddle yourself with unnecessary debt, especially for things like gingerbread houses and stocking stuffers.
Don’t Take Out a Loan
Taking out payday loans so that you can really get into the Christmas spirit is never a good idea. They have much higher interest rates than your credit card. So, it may seem like a great solution when you take it out, but it could end up being a problem for years to come.
It’s easy to get caught up in the excitement of the season. Remind yourself that all those gifts, treats and decorations aren’t worth the debt or the stress. Once you ignore the pressure and stick to the essentials, you’ll feel much happier whenever the holidays come around.