We’ve celebrated Thanksgiving and (in most parts of Canada) are enjoying the last warm days of the year. You’re probably not stressing about your holiday budget – yet. The good news is if you take some time to plan now, you could avoid that end-of-year money stress for good.
Every year we see tempting high-interest loans advertised through the holiday season, promising “no interest till the new year” or similar attractive offers. We’ve yet to see one that doesn’t have a big catch in the fine print. But if you plan now for how you’ll approach the holidays (including ideas to ramp up short-term savings), you can avoid borrowing expensively come December.
BDO’s recent Affordability Index reported that among Canadians whose debt is increasing, 70% blame the rising cost of living. If daily expenses are already a challenge, t’s no surprise that MNP’s Consumer Debt Index study from earlier this fall found that 6 in 10 Canadians are “at least somewhat likely” to take on more debt before the end of the year.
Here are our top tips to stay ahead of your finances through this holiday season:
1) Don’t be afraid to share (info): Chances are many of your friends are in a similar situation. Find others who are also motivated to stay on top of their finances this season and create a group chat or Facebook group to give encouragement to each other and share saving ideas.
2) Set mini-goals for each week: It can feel intimidating to save a large amount at once, but if you can set mini-goals to save an extra $20 or more each week, that will really add up between now and December. Maybe you’ll carpool instead of buying gas, go vegetarian for the week, or pack your lunch instead of buying it.
3) Expect groceries to get more expensive: If there’s one thing we can count on, it’s our food bills continuing to go up for the same items we always buy. Cutting back on meat and buying fewer prepared foods can save you serious cash. If you usually host big family events over the holidays, now is a great time to ask your family to share the cost of the meal or switch it up with a potluck instead.
4) Take a fresh look at familiar traditions: Are there certain traditions that you spend on each year because “that’s the way we’ve always done it”? Have an honest look at whether these traditions are still meaningful, or if there’s a less expensive alternative that would be as special.
5) Get your partner on the same page: If you and your partner aren’t focused on the same goal, it can feel impossible to get your family finances on track. Make a ‘money date’ where you talk about expectations for the holiday season, budgets for kids’ presents and gifts to each other, and commit to each other that you’ll stay on the same page even when holiday stress (and spending) is running high.