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Credit Coach: Dodging debt during the holidays

Load up on Turkey not debt – tips for budgeting through the holidays

Let’s face the facts. The holiday season, in whatever form you choose to celebrate, can be stressful — especially if you’re already worried about your finances.

There are gifts to buy, dinners to plan, family to visit and the last-minute rush to pick up something small for the hockey coach, the teacher, the piano instructor and good gosh, let’s not show up empty handed to Great Aunt Edna’s gingerbread and eggnog party.

With all of the commotion and moving parts, it is easy to see why many families are shocked by the crush of credit card bills that arrive in January. No one wants to worry about how they’re going to get out of credit card debt so soon after the holidays.

Having worked as a Licensed Insolvency Trustee and credit counsellor for 15 years, I have helped many families through tough financial times.

I believe that keeping an eye on your personal budget and doing some pre-holiday planning can help you get the most out of your holidays, while avoiding additional debt. The following tips can help keep you from being haunted by the ghosts of Christmas past.

  1. Keep in mind that the winter season already puts a strain on your personal or household budget. Hydro, home heating and grocery costs are usually higher in January, February and March than at any other time during the year, so any extra credit card charges during the holidays have to fit into that tighter budget.
  2. When planning your holiday gift giving, take a tip from the greatest of all gift givers. Santa and his list are legendary. I am not saying you should split the family into a list of naughty and nice, but planning ahead can help you stick to your personal budget. Think about what each family member or friend needs or wants, then figure out what you can afford to spend. If you make a list and set spending limits, you can avoid most of the last-minute impulse purchases that often derail a seasonal budget.
  3. The holidays are a time to relax and enjoy visiting with friends and family - Great Aunt Edna aside. Try not to feel the need to bring a host or hostess gift to every function if it means sabotaging your personal budget. Consider bringing along homemade baking or a thoughtful holiday message in a card. Alternatively, a prompt and sincere thank you note sent the following day will likely be remembered long after the pricey bottle of red or white wine is consumed. Consider that your host may be struggling with the same holiday stresses as you —arriving with a simple less expensive holiday offering may be appreciated.
  4. Take the time to enjoy and fill your family’s holiday season with all the free stuff that is available. The Santa Claus parade, the parade of lights, tobogganing and ice skating all cost very little or nothing to attend. That’s what is really nice about the holidays — it’s about time spent with your family, not about how much money you spend on an activity.

Follow these tips and your holidays will come and go without breaking the bank – and without additional debt. Having a spending plan and a personal budget in place can really reduce your holiday stress.

It also leaves you free to enjoy the magic of the holiday season —family gatherings, holiday outings with friends and worry-free gift giving — without having to think about how you’ll pay your credit card bills in January.