The holiday season is an expensive time for many! Between gifts, decorations, parties, and travel, the costs (and credit card charges) can quickly add up. To keep your budget and debt in check, holiday financial planning is a must.

According to PwC Canada, the average Canadian consumer will spend $1,593 during the 2019 season — up 1.9% from 2018. That number increases with the type of shopping consumers choose to do. The average online-only shopper plans to spend $1,053 while the average multi-channel shopper (in-store and online) plans to spend $1,726.

And that is just on shopping costs alone. This doesn’t factor in travel expenses, décor, food, and beyond.

Overall, PwC reports, 17% of Canadian consumers are worried about credit card debt. Millennials and Gen Z are even more concerned: 22% and 24% respectively think too much debt might build up.

Going into the new year with debt — especially high-interest credit card debt — is stressful. You need a plan to pay off your holiday purchases and leave 2019 on better financial footing than you started the year with!

Holiday financial planning is the key to both preventing overspending during the holidays and making 2020 your most successful financial year yet. Here’s how to go about it.

Assess Your Budget

A budget is important for planning your holiday spending. Knowing how much you can afford to spend will help determine what you spend it on!

• If you have a regular monthly budget, review how much you can realistically set aside for your holiday expenses.
• If you don’t have a regular monthly budget, review your past month of spending. How much income have you brought in and what savings are left over?
• Are there any areas in your budget or spending habits you could trim back on for your holiday spending?
• Decide on the figure you are comfortable spending this season and that you are able to comfortably repay into 2020.

Plan Your Holiday Spend

• Make a list of everyone you are shopping for, food-related items, decorations, travel plans, and other expenses you will encounter this season.
• Estimate how much you plan to spend per list item. Even just the act of doing this can be illuminating!
• At this point you may see that you have planned for more than is in your budget estimate.

If you’ve found that you plan to spend more than you can afford, you can try to either reduce what you plan to spend (looking for ways to save money) or you can go back to your budget and look for more wiggle room. To that end…

Clean Up Your Debt

One of the biggest hijackers of your budget is debt payments. If you owe money, you know just how much the interest payments alone can take out of your monthly budget. And even if it’s only a little bit, why not use that money for something else?

Consolidating your debt can free up room in your budget for holiday spending and start you on the right financial footing for the new year. If “get out of debt” is your New Year’s resolution, you’ll already be a step ahead.

Don’t Finance Your Holiday Spending 

If you’ve found that you plan to spend more than you have, you might be tempted to make up the difference with financing — credit cards, lines of interest, a payday loan, and so on.

Don’t do this! If you don’t have the income available now or won’t be able to pay off the expenses in full in the next month, it can create a stressful financial future. While you might profit in the short-term, you’ll have to make up the difference in the long-term. This can lead to lingering debt and credit score issues that you’ll still be trying to fix next holiday season.

Instead, look for ways to make the holidays great on a budget. Your financial future will thank you!

DebtCare Canada helps our clients with holiday financial planning, debt consolidation, budget planning, money saving, and more.

Contact us for a free consultation to set yourself for success during the holidays and beyond. Call 1-888-890-0888 or visit www.debtcare.ca.