The Christmas season has evolved over the years. Studies have shown that Black Friday sales now surpass traditional Boxing Day sales. Online shopping accounts for up to 30% of our seasonal shopping. Incandescent lights have been replaced by LED’s and most people have an ‘ugly’ sweater to wear to the staff party. People tend to say ‘Happy Holidays’ instead of ‘Merry Christmas’. One thing that hasn’t changed though is how it can impact your pocket book.
The coming holiday season can be a time of joy despite recent troubles both on the world stage and our local economy. This year, as we contemplate the true meaning of the season, we should maintain cautious optimism in our hearts and in our spending habits. The following steps can help you keep a sense of balance over both the holidays and your pocketbook.
Moderation is always key. Fear or stress can provoke knee jerk reactions to holiday spending. Some may turn into overzealous Santas and blow their budget on extravagant entertaining and gift-giving they really can’t afford. Others may be so stressed about the future, they turn into the Grinch, refusing to spend any time or money on the spirit of the season. Either extreme can put a damper on the season. The key is to find a balanced plan that works for you and your budget.
Studies have shown that average holiday spending in Ontario can now top $1000.00. Once you combine entertainment, decorating, gift giving and travel expenses it quickly adds up. Nobody said ‘be average’ ever. Make yourself a contract; write down the maximum amount you can afford to spend for the holidays and resolve to stick to it. Make a gift giving list including everyone you buy for and set a limit for each. After adding it all up ask yourself, ‘Can I afford that?’
If you answered ‘No’, start looking at ways to reduce the amount. Break down the amount and set a cap on what you can afford spend in the following categories: gifts, entertaining, and miscellaneous items (such as travel, clothing or decorating). Add some cushion to your budget to cover unexpected or hidden costs. If you have to use credit cards a good rule of thumb is to not borrow more than you can afford to pay down in a 3 month window of time. This ensures reducing long term interest charges and having this Holiday Season paid off before the next one begins.
There are simple ways to trim down your expenses. If you can’t travel to be with the ones you love, FaceTime, Skype, call, send an email or go old school and send a greeting card. Connecting with people during the holidays means everything but doesn’t need to cost much. Try culling your gift list and suggest that family members exchange names rather than buying an individual gift for everyone.
Another idea is to invoke a “make it or bake it” rule for gift giving; often these sort of gifts cost less and mean more. Although kids may still need the thrill of store bought gifts, they can help keep family’s costs down by giving homemade gifts such as crafts, homemade playlists, or “coupons” offering their help to complete a special chore. If time and money are at a premium over the holidays, forego fancy dinner parties and organize a pot luck at someone’s home. These are just a few examples, there are many more out there if you start looking.
Communication is always important. Talk about expectations with your family before the holiday. If you have kids (young or grown), discuss what’s happening in the world and how moderation and charity can be applied. Ask them for suggestions on how this holiday season can be made more meaningful and affordable. If you or loved ones have been directly hit by the economic downturn, think about exchanging gifts of time such as babysitting, running errands or housework.
Don’t let limited funds discourage you. It is in times of hardship that we need to remind ourselves of the blessings we have overlooked in our lives. Think back to previous holiday seasons and you will likely find the memories of who you shared that time with are stronger than the memories of what presents were given to you.
A smile costs nothing but can be priceless. The spirit of peace and hope has remained triumphant for centuries and will renew itself again this Christmas season. We wish you happy holidays and a prosperous new year on behalf of Credit Counselling Service of Sault Ste. Marie.