” A recent survey from credit rating agency TransUnion suggests that debt will only mount this year for many Canadians. It finds that 64.6 per cent of us don’t sock away money for holiday spending. Fewer than 15 per cent say they don’t start saving until October.”
For a lot of people, “saving” for the holiday season consists of making room on the credit card or, worse yet, getting the limit raised or applying for a new card.
“A recent Bank of Montreal study says the average Canadian spent $1,600 last year on gifts, travel and entertainment and that number is expected to grow this holiday season. TransUnion says for a lot of consumers that kind of spending means using credit cards, opening new lines of credit or taking on extra debt. “
“TransUnion warns excessive inquiries for new lines of credit, higher balances and large amounts of debt can do a lot of damage to a consumer’s credit health. They have a few pieces of advice for consumers before they go shopping this year.
1) Make a list and check it twice
“Before you head out to do your holiday shopping sit down and make a list of all the people you want to buy for, and how much you would like to spend on each. It may require trimming an amount or even a name here and there, but if you stick to that list you can avoid overspending.”
Realistically, as an adult, spending money on other adults (who, in turn, spend money on you) is a pointless exercise in consumerism. Unless you are planning for a net profit (involving strategic gift buying and returning their gifts for cash), your time would be better spent spending quality time with those family and friends.
2) Budget and save
“Once you determine the total amount you want to spend on holiday gifts this year divide it by the number of paychecks you will receive between now and the holidays.”
Another option is to buy gifts throughout the year and put them away for the holidays. Not only is it easier on the bank account but I would argue that the gifts will be more thoughtful. Warning, make sure that you don’t forget where you hid them.
3) Shop now, gift later
“You may know someone who shops for Christmas throughout the year. Being eternally vigilant gives them the opportunity to scoop up bargains as they arise. It may be too late for that now, but keep an eye on local circulars and the Internet regularly for bargains as they pop up. “
Thanks to the internet, you’re no longer stuck with dealing with packed malls, long line ups and other stressed out gift buyers. Most large retailers now sell online and even have “online only” specials. Even better, check Ebay or Amazon for used bargains and odd gift ideas, you still have enough time to get it shipped to you before the holidays and the reaction to a well thought out or quirky gift idea is worth the effort.
4) Save for yourself
“Saving ahead for the holidays is a great way to reduce personal stress during a normally stressful time. Day-to-day life goes on through the holidays and that’s why it’s important to save a portion of each paycheck for any unexpected financial emergency.”
A first good step is to not going into debt this holiday season. Once the holidays are over, you won’t be dealing with a debt hangover in the form of higher credit card payments. Instead, you can use the financial breathing room to pay down any already existing debts and save towards an emergency fund.