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Coping With Christmas In Debt


Having to spend Christmas in debt can be emotionally trying. There are a few occasions in our lives where much of our financial responsibility gets thrown out the window. Babies are probably number one, but weddings, vacations, and Christmas (or Hanukkah) are close behind. December holds the time of year where many replace their penchant to save money with exorbitant spending.

In fact, according to Statistics Canada, we spent $1.9 billion dollars on e-commerce sales alone in 2017.

No matter how disciplined you’ve been all year, it’s easy to justify outrageous spending as the holidays approach. If you are about to take on Christmas in debt, we suggest you put down your credit cards and read this first.

If you understand your credit score, you’re ahead of the game. There are several ways you can approach gift-giving and the Christmas season without increasing your debt. Avoid holiday debt this year and sharpen your personal finance skills while you’re at it.

Common Misconceptions About Christmas Spending

Many people see the holiday season as the time to start relaxing on their set regiments. From taking on excess calories from all the treats to overdoing it on Christmas shopping, things can get out of hand. Some allow their emotions to take precedence over logical reasoning, and are willing to enhance any debt problem by thinking:

  • It’s not for me, it’s for friends and family, which is worth more than staying in debt a little longer
  • The kids will be devastated if they don’t get a ton of presents
  • Celebrating life is more important than debt
  • I want to have a good time and can worry about the credit card bills later
  • I anticipate earning more money in the new year, so it’s okay to splurge now

Are these valid? They may ring true, but that doesn’t mean you should accept them. It’s time to start being less emotional with your spending habits and practice discipline.

Are you serious about getting out of debt? The one lesson that most people learn on their debt-repayment journey is that while slow and steady might win the race, there’s a lot of power in putting most of your focus and energy towards succeeding. That means attacking your credit card debt every day, at every opportunity.

Having a lapse in judgment won’t make things any better.

Staying Focused

The fact is, taking a month off to shop around, look for deals, and push through crowded malls will have a seriously adverse effect on your focus.

Every extra dollar you’ve been throwing towards debt has been a message to your brain that THIS is your priority. As you go, it gets easier to avoid temptation. Keep driving past the coffee shop and make a cup at home, fix the leaky faucet instead of renovating your kitchen, etc.

Backtracking on this mindset sets you back much further than just the dollar amount you’ve spent. Stick to your payoff strategy, whether it’s the avalanche, snowball, or some other tactic.

But keeping your laser focus doesn’t mean depriving your loved ones of gifts. Instead, get creative and consider giving them a heartfelt holiday gift.

Alternatives to Expensive Presents

Your family is in the same boat as you are. Spending Christmas in debt can be a bummer if you don’t plan it correctly. While most parents avoid conversations about money with their children, it’s rare because children can’t understand what’s happening. Leading up to the holidays (or anytime), you can start framing your conversations about your process of paying off debt.

Turn your situation into a valuable learning tool for your children. When it comes time for presents, find activities and games you can participate in rather than filling their rooms with more clutter. Yes, they might be upset they didn’t get that new iPad, but you didn’t grow up with one and you turned out just fine.

With friends and extended family, you’ll have to judge based on the relationship. We’re not trying to cause extra stress by straining awkward social relationships, but the truth is simply that you cannot afford to spend money lavishly this year.

Before anything else, start with a Christmas budget.

Other low-cost alternatives to buying gifts include:

  • Baking large batches of cookies, cupcakes, brownies, etc. and rationing them amongst friends and family
  • Creating personalized “gift cards” that offer free services that leverage your skills
  • Show your family a good time by hosting a holiday potluck complete with memory-sharing activities with photo albums, stories, and games
  • Craft other homemade gifts from wood, paper, or other materials you have

Consider alternatives that are more meaningful than a mall gift certificate. Or, simply explain that you’re not participating in any gift exchange activities this year and don’t want anything in return (again this will depend on the relationship with the person in question).

Get Creative

Yes, this might be difficult. It’s so much easier to let your credit card absorb all this awkwardness and deal with it in January when you pull your head out of the sand. That’s what most people do. But you’re not most people.

You’re getting serious, and you have a plan.

Minimize your holiday spending with these methods:

  • Set up a Secret Santa gifting policy where everyone only purchases one gift for one person randomly selected
  • Buy one gift that every family member can use
  • Start a savings fund or investing account for the future
  • Split the cost of gifts with a partner
  • Cash in existing credit card rewards

Final Thoughts

This year, go for meaningful gestures and memory-making activities rather than this years’ ‘must-have’ forgettable toys.

Lastly, if you know you’re going to be struggling financially this season, always remember that there are thousands of seasonal jobs available that you might be able to do part-time to help bring in a bit more cash. Avoid the dreaded debt hangover in the new year. Take a stand and resolve to make this your last Christmas in debt today.

Use one of our many ways to get in touch and find the help you need now.

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