With Black Friday kicking off the holiday buying season, how much do we actually plan on spending?
Recent reports by PWC, CPA Canada, and the Retail Council of Canada (as reported by CTV news) indicate that we are in for an expensive month. Canadians are planning to spend $ 650.00 on gifts alone this season, with travel and entertainment adding an extra expense for many Canadians. This all adds up to an estimated spend of over $ 1,500.
While the numbers alone aren’t cause for concern, the surveys also report a few other more alarming statistics. 46% of Canadians won’t be planning out their spending over the holiday season, and in a Manulife report mentioned by CTV news, 60 percent of consumers are willing to go into debt over the holidays.
What does this mean?
The old adage “Failing to plan is planning to fail,” might be applicable here. Without a general sense of how much you are planning to spend, it is hard to save for the holidays ahead of time. This leads to loading up the credit cards, and paying far more than you planned once those interest bills start coming in.
Putting a plan in place, and sticking to it, can avoid some of the nasty surprises that January usually brings. Since Christmas comes fairly reliably every year on December 25th, it would make sense to allocate some dollars to the gift fund throughout the year. Automatically contributing each month to a small gift fund will help ensure that you always have the resources to show your love and appreciation to those you care about.
But it’s too late for me now!
Let’s say you don’t have a gifting fund already set up, and the holiday season is upon us already. What can you do?
There is still time to put a budget in place! Speak with those loved ones that you plan on exchanging gifts with, and work out a reasonable budget. This helps you both out, by taking the guess-work out of how much should you spend, and lets you focus on what you want to give.
And if you do need to take on debt this holiday season, make sure you pay off your credit cards in full each month. This will ensure that your high interest debt doesn’t end up costing you far more than you planned to spend on the gifts.
The holiday season is supposed to be full of love and joy, don’t lose sight of that amidst financial concerns. The right plan can help you get through this season with a full cup of holiday cheer!