Christmas Without Debts – It's A Wonderful Life

2014-12-19   minute read

A survey conducted by Pollara for BMO revealed that Canadian holiday spending plans in 2013 were up for the third straight year, with anticipated average spending on travel increasing 22% to $689, while average gift-buying went up only slightly, to $678 from $674. In the survey of some 1,215 Canadians aged 18 or over, 41% of those surveyed said they start their holiday shopping in November, while 33% begin earlier and 23% wait until December.

Decorated Christmas tree surrounded by glitter

Following this BMO survey, Pollara conducted a separate survey for Visa Canada of 1,001 Canadians which revealed that three in four of those polled said they planned to shop online for gifts and that the majority, 78%, said they planned to use credit to do so.

Furthermore, when it comes to gift giving and travel, the surveys found that:

  • When it comes to gift giving, Quebec is the most frugal, spending an average of only $433 compared with $873 in Ontario, $759 in the Atlantic provinces, $708 in Alberta, $635 in Manitoba and Saskatchewan and $520 in British Columbia.
  • Quebec was the thriftiest again, this time when it comes to travel, spending $379 per person, in comparison to Alberta at $849, Ontario at $838, British Columbia at $816, the Atlantic Provinces at $581 and Manitoba and Saskatchewan at $539.

Christmas is one of those holidays that is filled with cheer, travelling and gift-giving, but it does not have to become a competition between you, your neighbours or your friends as to whose gifts and decorations are better or more impressive or who is going where on holidays. Your real focus this holiday season should be on getting together with family, friends and those who are ‘less fortunate' to share in happy moments.

However, one does not need to become Ebenezer Scrooge either – frugality can be cool! It can be more meaningful and more affordable to put more creativity and effort into making a gift rather than trying to show love by paying to buy one.

During this season of spending, it is vital to differentiate between 'wants' and 'needs', between 'impulsive' and 'compulsive' buying and to understand the real cost of what you buy against the actual worth of the gifts purchased on credit. When we are emotional, we tend to become more fragile and thus make more impulsive decisions, which we often regret in the long run. Seeing other people shopping at malls or going on a holiday when you cannot afford to do so can cause stress. This is the time where common sense must prevail and you must be practical and honest with yourself. No one will think of you any less if you are unable to buy gifts or travel, as long as you are self-confident.

Unfortunately, holiday purchases can also be a nightmare for those with mounting debts.  Despite good intentions, the purchases, dining and gifting that put us in the spirit of the holiday season can also leave behind some very unsettling and worrisome feelings once the festivities are over and the reality of debt sinks in. Keep in mind that December is traditionally an expensive month for most Canadians, not only because of Christmas gift shopping, but because of increased heating and electricity bills.

Once the holiday season is over, the world seems to pause in unison for a brief minute, as we all get a chance to reflect on our spending. Some of us might find ourselves staying ‘Home Alone’, trying to hide from debt collectors who hound us through constant telephone calls that simply aggravate the situation even further.

Successful Spending Involves Managing Expectations

Christmas does not have to end with loads of debt if you learn to be a savvy shopper, show some self-restraint and have a well-crafted strategy from the outset in terms of creating a holiday spending budget for gifts, travelling and dining.

To help put things into perspective, ask yourselves if you would want a friend or family member to give you a gift knowing they were having financial challenges and purchased your gift on credit. The answer is no and the answer would be the same if you surveyed your own friends and family.Keep in mind that spending less money doesn’t mean Christmas will be less memorable. Spending time withyour kids, family and friends is a priceless gift that fits any budget.

Here are some tips to avoid accumulating more debt over the holiday:

  • Do not try to one-up the ’Griswolds’ next door and spend too much money in the process
  • When giving gifts be practical and frugal. It can be more meaningful and more affordable to put more creativity and effort into making a gift rather than trying to show love by paying more to buy one.
  • Do not fall for retailers’ holiday shopping ploys.
  • Monitor your income and expenses, and track your budget periodically. Cut unnecessary expenses from your budget when necessary, and only consider gradually adding them back in once your debts are at a low enough level and your income at a high enough level to support them.
  • Have a strategy in place for reducing debt, including goals. Use the ‘snowball method’ during Christmas season by making efforts to pay off debt with higher interest rates first.
  • Use tax refunds to pay off Christmas debt.
  • Be willing to make sacrifices today for a better tomorrow.
  • Take advantage of the rewards offered by some credit cards.

If you are still struggling with debt after the holiday season, contact your local MNP Ltd. debt relief representative to learn about what life-changing debt solutions are available to help you have a ‘Wonderful Life’.

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