The holidays can be a lot of fun and they can also be very stressful for those who already struggle with debt. It is the season of giving, which often means it is also the season of spending. Two of the best things you can do to help make the holidays a lot less stressful is to talk to a debt counsellor about your finances before the silly season starts and to create and stick to a holiday budget. Creating a holiday spending plan and having someone to advise on your financial situation will alleviate your stress and make sure you don’t go into debt this holiday season.
Speak to a Debt Counsellor before the silly season, not after.
Before you apply for another credit card or consolidated loan to cushion your holiday spending, talk through your finances with a qualified debt counsellor. Everyone’s financial situation is unique, and a debt counsellor sits and works through all your numbers to understand where and on what you spend money. Once we have the bigger picture, we can recommend the best way forward for you to become (and stay) debt free.
This holiday season DebtCare is offering free applications and financial reviews. Start your free application here.
Make a List of Holiday Expenses
First, you should make a list of all the holiday expenses that you will have. This includes gifts that you need to buy, cards, wrapping paper, travelling expenses, gift exchanges at work, charitable donations and decorations. This will give you a basic idea of costs that you will need to cover. Many people only think about the gifts and wonder why money is so tight in December even if they saved up money for gifts.
Decide on Your Spending Limit
Determine how much you have available to cover Christmas expenses this year. When you are considering this amount be sure that you only use money that you have set aside for Christmas or extra money that you can find in your budget.
Assign Money to Each Category
Divide the money up over the different categories that you have. This means assigning a specific amount for each gift. This is also helpful when you brainstorm gift ideas. Having a set amount helps you find ideas within that price range.
Make a Shopping List
Create a list for your holiday shopping. You should have one or two ideas within your price range for each individual. If you take the time to search the sales you may be able to find some great gifts for less money than you budgeted or you may be able to get that person a nice gift.
Track Your Spending
Then begin shopping with your list. You should also take your budget sheet with you. As you purchase each item cross it off your list and subtract it from your running Christmas budget total. This will let you know how your budget is doing at all times and make it easier to make adjustments between categories if needed. Tracking your spending is the biggest key to sticking to your budget.
- Do yourself a favor and stick to a cash-only system. Putting the gifts on a credit card makes it easier to overspend. This can really help you to stick to your budget for the holidays. It is a great strategy if you are short on cash and you do a lot of your shopping at the store.
- Take advantage of the Black Friday sales coming up on 23 November. The doorbuster deals can save you a lot of money. Reviewing your list and the sales ahead of time can help you maximize your savings here.
- Shopping online can save you money and time as you comparison shop. Many online stores offer extra savings and free shipping over the Black Friday weekend. Be sure to check out the Cyber Monday sales too.
- Always add a few extra gifts to your shopping list. These gifts should be generic in case you receive a surprise gift or forget to shop for someone. It can ease your mind and save you from scrambling to find something at the last minute and buying something too expensive because you’re short on time.
- You can earn extra money to cover your holiday expenses by taking on a holiday job. This may be a good short-term solution if you forgot to budget for the holidays during the year.
- Start saving in January to make shopping at Christmas easier. If you put aside money each month to cover your Christmas expenses, you will not need to worry about finding the money for the gifts or trips that you want to take over the holiday season. This is another area where Debt Counselling is extremely helpful. You’ll know exactly what your debt repayment amount is every month, making it much easier to know how much money to put aside.