Give debt a break this holiday season

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Sabrina Almeida

Feeling the pressure to be extravagant with family and friends? What better time than Christmas to spoil the loved ones, right? Wait… isn’t that what we say to ourselves at birthdays and a hundred other special occasions during the year? Time to stop putting a price tag on love!!!

It’s no secret that most of us will probably go over the budget thanks to the emotionally-charged holiday season that retailers love to exploit. The commercialization of what is a religious festival with Black Friday deals and shopping mall Santas has made gift-giving a multi-million-dollar industry. A 2014 study found that 8 out of 10 non-Christians in America celebrated the holiday.

The decorations and carols right from the last week of November are all about loosening our purse strings irrespective of religious orientation. But given the mountains of debt Canadian households are being buried under, it makes little sense to let the holidays add to our financial and mental stress.

One survey found that nearly 50% of Canadians overspent on holiday purchases last year. What’s worse is that 40% didn’t have a plan to pay their bills and around 25% were ready to use their savings to cover the expenses.

Another study revealed that around 30% of Millennials who went into debt in the last holiday season are still trying to pay it off. Yet 60% will rack up more debt this festive season. 

Sadly, almost half of the respondents admitted to feeling immense stress because of the gift giving and more than 50% said they would give it up if they could. Unfortunately, many of us don’t want to come across as cheap and continue the practice. That explains why we’re uncomfortable with going ‘empty-handed’ to a relative or friend’s house. But the truth is that if we are going to feel any remorse or shame it should be about spending more than we can afford.

Financial planners and advisors say it’s time we get a grip on our spending habits. Should you bust your budget on the hottest children’s toys or give each family member multiple gifts when your finances are in the red? One way to avoid being haunted by debt ghosts in the new year is to take a look at one’s finances, make an affordable gift-giving plan (if you must) and stick to it. The biggest pitfall to avoid — letting one’s emotions get in the way.

According to the Retail Council of Canada the average person intends to spend around $675 during the holiday season, however most don’t keep to this amount. It’s also important to budget for celebrations (including food and alcohol) and travel along with gifts, which many forget to do. And the biggest trap of them all is the “one thing more” syndrome. Who leaves any store with just one thing? Research shows than more than 70% of shoppers are likely to make impulse purchases including gifts for themselves.

Perhaps the news that a majority of Canadians are planning to rein in holiday spending given the rising debt loads should motivate us. Whether or not they will stick to this resolution remains to be seen. A random survey conducted last year is not very encouraging as it showed that Canadians hadn’t changed their spending habits from the previous year.

Also be warned that the reduced-spending news won’t go well with the retailers who are therefore likely to go all out to tempt you into breaking your resolve.

December 23 is typically the busiest shopping day with desperate shoppers rushing to get last minute gifts. Imagine the stress you could save yourself by going gift-free!

Research shows that often we give gifts because it is expected of us. However, the gifting doesn’t always make the giver or receiver happy.

The holidays don’t have to be about stuff. Why not give your loved ones the gift of your time instead?

Let’s go stress-free by giving debt a break this holiday season!

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