It's hard to believe the holiday season is upon us. And, according to the popular song, “it's the most wonderful time of the year”. If you've planned ahead and saved for your holiday spending throughout the year, you'll be able to concentrate on the fun activities of the season: spending time with family and friends, giving and receiving gifts, feasting, food, and looking forward to the year ahead. All you need to do is stick to your holiday budget and enjoy the season knowing you won't be over-extending your financial limits.
But what if your best plans to save went awry and your savings fall short of the amount you usually spend? Don't panic! There's still time to plan and rethink your holiday spending habits.
The majority of Canadians don't do any kind of advance planning for their holiday spending. The average Canadian spends between $800 and $1500 at Christmas time and many use their credit cards exclusively for these purchases. By following the ‘spend as you go' method, they spend at least $100 more than expected, and are still paying for their Christmas purchases months later. Don't be average! Start planning right now! Even if it's Christmas Eve, you can't go wrong by planning out your spending.
First, set a realistic amount that you can spend. How much can you set aside from your remaining pre-holiday pay cheques? Do you have any savings? Are you willing to use some of your savings for the holidays?
Next, make a list of all the things you'd like to do over the holidays, like entertaining, travelling, gift giving, decorating, etc. Then estimate the cost for each of these items and add up the amounts. Now, compare that total with the amount you can spend. Congratulations, you've just made up a holiday spending budget! Now all you have to do is stick to your budget. Take your holiday spending list with you when you go shopping, shop when you're not tired or in a rush, and make adjustments to your budget if necessary.
But what if your plans exceed your income? Take another look at your spending list, and sort the items into the things that are very important to you and your family, and the things that you could do without. Pare your list down to fit your spending limit. For many people, these are very hard choices, and tied up with childhood memories. You may need to set aside the emotional aspects of your ideal Christmas and think about what the holidays really mean to you. Is it about spending money, or is it about spending time with your friends and family and celebrating the magic of the season?
No matter what, resist the urge to use credit cards or pay day loan services. Credit cards lead to overspending and impulse shopping, and cash advance companies charge excessive fees. Instead, focus on fun! Talk to your family about spending less this year, not because you have to, but because you want to! Ask everyone to come up with some unique gift ideas and new ways to have fun. If you need some inspiration, the library and the Internet are full of great ideas.
Then, make a New Year's resolution to start saving every month for next year! No matter what, make sure it's “the hap-happiest season of all”!
Janet Scotland, Financial Counsellor
SISIP Financial Services, Comox
This article is for general information purposes only and is the opinion of the writer.
