Tips for avoiding holiday debt
When it comes to the holiday season, who doesn’t want to shower their loved ones with lavish gifts?
You shouldn’t, experts say, if it you plan on purchasing those presents with a credit card.
“It’s so easy to overspend during the holidays,” says Karen Liberty, a licensed insolvency trustee with MNP Debt.
“There’s intense pressure to buy the perfect gift and make the holidays perfect.”
Liberty says it’s very common for her and her colleagues to meet new clients in January who buried themselves in debt late the year before.
PwC polling suggests the average Canadian consumer expects to spend $1,635 this holiday season – that’s 13 per cent higher than 2022.
At a bustling Devonshire Mall Monday, shoppers said they had other plans.
Many said they’d be cutting back due to inflation.
“For the first time in a very, very long time I’m a lot more cognisant of the monthly budget,” said Anita Gatti.
Sheila Urquhart said she’s “finding things more expensive this year.”
Both women admit to relying on their credit card for gift purchases — something Liberty said is ill advised.
“Use debit or cash instead,” she said.
Liberty has four tips for avoiding what she calls a “financial hangover” in the New Year.
1. Set a spending cap for gifts
“Have a budget that you can afford and stick to it,” she said.
“That’s really the number one thing.”
2. Leave the credit cards at home
“We tend to overspend when we’re using our credit cards,” said Liberty.
3. Draw names between family and friends
Everyone in your friend group or family (or just the adults) puts their name into a hat, take turns drawing names and that’s the one person you buy for.
“Friends and family may be facing the same financial challenges that you are and may welcome the opportunity to reduce their spending,” Liberty said.
4. Reduce number of large gatherings
Spend less on groceries and gifts.
“Keep it small with close friends and family,” she said.
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