Holiday Survival Guide

Ben: Alright, hello everyone and welcome to another consolidated credit webinar. We’re joined by our executive director Jeffrey Schwartz again, and today we’re going to tackle an expensive time of year for many Canadians. The holidays. So, Jeff, thanks for joining us. Let’s get started.

Jeff: Ben, thanks again for having me. This is always a time when budgets are stretched thin, so it’s great to be here to talk to some people around how they can survive the holiday season and save as well.

Ben: All right, so that’s what we’ll talk about today holiday budgeting which, like you said, often feels like survival or holiday survival. So, a large part of our discussion today will be around planning and preparing for this annual event. So that means budgeting and with any holiday budget comes spending. So, we’re going to look at some ways we can try and control that as well, and finally everyone loves to save money. So, we’ll examine some ways to save money during this very expensive time of year and yes, it is actually possible to save some money during the holidays.

Jeff: You know, that’s right then I’m not sure everybody loves to save money but there are definitely ways to save money and let’s try and find some that are realistic during the holiday season and we’ll try and help people be a little bit more successful at it. So, as you can see there in that map of Canada, we just can’t help but overspend during these holiday seasons and we could even put a number of 42% to be more specific. That means that the average Canadian was overspending by 530 dollars. That sounds like a lot of money but it might not be a large enough amount to destabilize someone financially, but what worries me is where that five hundred and thirty dollars came from and most times it’s just added on to you debt your pile of debt.

Ben: Yeah, so, I mean that chart there. It might have been people that did have a budget or some sort of a plan that they thought would work and then, you know, they go out and spend an extra five hundred dollars. That’s a really good question. Where did that $500 come from? So, that’s why we’ll spend a bit of time covering budgets. So, a big part of any holiday budget is knowing when to start. So, when would you start a holiday budget?

Well, my advice is always as soon as possible. For many, the holidays are an annual event. It happens every year. So, if you start your budget before the holidays roll around, it’ll become sort of like a habit, and as each holiday season rolls by, it’ll become easier and easier, and when you start really depends on you and more specifically, your personality. Some people like to shop weeks or even days before the holiday. That would be me. I love Amazon Prime. Others, you know, like my wife or my mother, are more inclined to start much earlier. Sometimes they’ll start picking up things in the summer. I’ve even heard of people doing their holiday shopping for the following year during this year’s boxing week. So, like I said, it’s an annual event. It happens every year. So, if it’s an annual savings event like boxing week or Black Friday or something like that, why not take advantage there.

Jeff: And I agree Ben. I mean, the holiday season comes just once a year, but when it comes to your holiday budget, you’re free to start whenever you want and after that, it’s the same steps as any other budget. All you need to do is some basic math. Only in this case, instead of income, you’ll have a budgeted amount to spend and instead of expenses, you’ll have things like gifts, decorations, travel costs, and entertainment. All sorts of different things.

After that, just like with any other budget, you’ll need to categorize these expenses and then rank them in some sort of priority sequence. Like with any budget, it will come down to wants and needs. For example, your kids will probably want everything on their list, but you’ll need to set some goals and spending guides, before you take off to the mall. Which is why we developed our holiday Survival Guide workbook. It’s available in print and on our website, but it outlines all of these points for you in an easy-to-follow guide, designed to help keep your spending on track

Ben: Right, and we’re going to be referring to that holiday Survival Guide throughout the webinar, here. So, you know, like Jeff just mentioned. In a personal monthly budget, you’re going to look at income and expenses, but in the holiday budget, we’re going to look on the income side of things. Well, that’s your budgeted dollar amount. How much money are you going to spend? The target amount that you want to spend for all of your holiday related expenses.

So, in this case, holiday expenses often include decorations, travel, and of course, gifts, and as we can see, the Canadian average is over there in that graph. Travel is the big one. For holiday travel, it could be something like a vacation, where you want to go somewhere warmer and maybe you’ve planned that with your entire family. For others, it involves flying back to, you know, wherever they call home, and sometimes it’s just getting stuck in a blizzard on the highway on the way to your in-laws house. So, whether it’s just some gas money or a first-class ticket to a tropical island, you’re going to want to track it as part of your holiday spending

Jeff: And Ben, so, if the traditional math of a personal budget is income minus bills and expenses, in your holiday budget it’s going to look more like your budget amount minus your holiday expenses and just like that personal budget, we want to at least zero out, or in the best case have some money left over. Now, however, as we just saw a few slides ago, that’s rarely the case. We tend to overspend and sometimes, that means using credit or a loan because we might not have the money available to us.

Ben: All right, so, as much as it is simple math, it can be a little bit more difficult than just, you know, simple subtraction. So, like any budget, the first thing we want to do is categorize our expenses, or our holiday gifts. So, who is who? How much are we planning to spend on those people and a real important question is, do I need to buy something for everyone. So, for the who’s-who part of it, just make a list of everyone you’re thinking of.

Family, close friends, teachers, co-workers. Everyone, even if you only plan on getting them a card or like a $5 gift card, be sure to write it down. When you get into the dollar amounts for each person, start looking at what the bigger picture is. What percent of your budget are you spending on that person? So, let’s say, you had a, you know, a healthy two thousand dollar holiday budget for you and your family this year, but maybe after you go shopping for your wife, it turns out that you spent five hundred dollars on her gift. Is it okay that you just spent twenty five percent of your budget on your wife? Now answer carefully, because it’s a personal question, but the most important question asked is “did I plan to spend that much?” Or “did I let myself get out of control?”.

Jeff: Right, and it’s really about remaining in control, and if you spend too much when you’re outshopping, maybe you want to try to stick to one credit card or debit card, or better yet, use cash. When your wallet is out of cash, you’re done shopping for the day. Another way to avoid this overspending, is not to spend. It sounds simple, but it’s not as easy as it sounds. It may take some creativity but ask yourself if there’s something you can do for that person instead of buying something for that person. You can try baking if you’re a good Baker. You can create personalized gift cards or coupons. You can even involve the whole family in some sort of art or craft activity and make something that’s special for family and friends.

Ben: Right, so, you know, what do they want. Well that’s why we spend some time, kind of, prioritizing the list and when it comes to personal budgeting, this is an exercise I like to do with my clients, either in the workshops or one-on-one. I get them to prioritize their monthly expenses, so it makes sense to do it for your holiday expenses. The gifts. To travel. All that sort of stuff. So, an easy way to do that is just ask yourself, “is blank more important than blank?”

Now, I know it sounds cold, like asking is my mom more important than my wife. I mean, everyone’s family is important but as you can see in the example list over there it’s, pretty common to find husbands and boyfriends bottoming out on the list. Parents, on the other hand, tend to show up in the first few spots, and rightfully so. So, in terms of your holiday budget, it probably makes sense that you’re going to spend a little bit more on your parents or your kids, than you would on say, your neighbor or your mail carrier.

Jeff”: Now, Ben, there’s a there’s a few good points there for sure, and just like with your monthly budget, once you’ve established what those priorities are, you can then start to look at how much money you’ve got to spend. It’s also important to ask yourself two questions, “how am I spending on this person?” And “what percentage of my holiday budget is that?”. If your total budget for gifts is say, a thousand dollars and the gift you wanted to buy for your wife costs four hundred ,again, are you okay with spending 40% of your budget on her and more importantly, is the remaining $600 going to be enough to cover the rest of your gifts that you plan to buy. You want to make sure you ask these questions before you go shopping.

Otherwise, you may find yourself overspending or using more credit than you wanted to.

Ben: Great, and that’s why we’re spending so much time on, you know, this plan. So, those are all big parts of any budget but don’t worry. If you get a copy of our holiday Survival Guide workbook, like we said, we’ve got you covered. The work is done for you. Just need to fill in the blanks there. So, hopefully, you know, you’ve hit the shopping mall or maybe, you’ve gone on Amazon. Now, you’ve categorized your list, you’ve prioritized the shopping list, and now you’re ready to create it and you’ve probably got something.

There, we have immediate family, extended family, friends. That sort of thing. So, shopping is often the fun part. So, I mean, go out and enjoy it. Go get the gifts, buy the decorations, and start finding all those ingredients you need for cooking or baking. Whatever it is, but just because you finish your holiday shopping, sometimes, it feels like a great accomplishment, and yeah, I get it is, but it doesn’t mean that you’re done with your holiday budget.

Jeff: You know, I agree Ben. You need to track those expenses and what you’ve spent, and again, we’ve done the work for you in our holiday Survival Guide workbook. You’ll see that the far-right column is titled “actual dollars spent”, and that’s where a lot of holiday budgets go wrong.  Perhaps, people are happy to make a plan or create a list, but then the shopping starts and sometimes mistakes happen. They buy too much.

They buy something off of the list, then they buy something for themselves and that’s why we need to track the plan versus actual spending. If mistakes happen, that’s okay. You can fix them, but if there’s no budget or plan in place often the mistakes are made and nothing is done to correct them, and this is one of the reasons why I think we see such high levels of credit card debt in the months following December.

So, if there’s a shopping oopsie and you’ve overspent somewhere, track it. There’re really only two things you can do after a mistake is made in the holiday budget. You can either increase your budget or get more money, or you can try and cut down spending somewhere else in the budget. Using your credit card and dealing with it after the holidays is not a wise idea. Yet, as we saw earlier it’s still a popular one for way too many Canadians.

Ben: Unfortunately, it is, so we really need to take some time and, you know, as we’ve mentioned, come up with this plan. The holidays are often an annual event, but for many of us, myself included, we often wait till the last minute to go shopping, so it make sense to, you know, shop early. Like I said, we’ve heard about people doing holiday shopping for the following year, during boxing week. Others, you know, buy one or two things throughout the summer.

Some start before Halloween. Whatever the case is, shopping earlier is certainly going to reduce the stress of holiday shopping. You know, anxiety around crowded malls, parking, that sort of thing. Just be sure you do your research. Doing the research can literally save you hundreds of dollars. So, spend some time looking for the best sales. Check out online forums, rudderposts, and subreddits related to the thing that you want to buy, and really try and find out what the best prices are.

Don’t forget to look for store or manufacturer coupons and be sure to price match. There are lots of big box and retail stores out there that price match. So that’s not only a great way to save money. It’s also a great way to save you some time, by shopping at one or two stores instead of running all over town.

Jeff: Now Ben, those are some really great tips, but at the risk of sounding like a broken record I just want to reiterate that you need to track your spending. Remember, those planned versus actual spending variances are the biggest contributing factor to holiday related debt. So, maybe you need to just use a piece of paper and track your spending as you go. Perhaps, you want to keep receipts and add them up after a day of shopping, and if you’re going to use plastic, be sure to try to keep it to one credit or debit card, so that your spending is much easier to track.

Ben: Alright, so, we’ve been covering holiday spending and holiday debt, pretty much, every year for the last 11 years or so. As such, I think we’ve been able to put together a pretty comprehensive list of tips and strategies that can help you during this expensive time of year. Firstly, think about your favorite holiday memory. Did your holiday memory involve expensive or elaborate gifts? Probably not, right, so just keep in mind that memories are often cheaper than gifts.

Is there any new tradition or a memory that you can try and create, or recreate this year? Next, like we said, you can always see if you can make something, rather than buy something. Now personally, I’m a terrible baker, so I would never do that to my family, but I’m sure they might like a photo album or a scrapbook, or something I could put together with some dollar store supplies for, you know, under ten bucks. Another trend I see around the holidays involves charities and donations. Many people are geared up to give during the holiday season, which I mean, that’s a great thing, but not if it’s going to impact your personal financial situation negatively.

I’ll agree it’s much easier to cut a check than to donate some of your time, but one thing I know for certain, is that many community service organizations and charities are desperate for volunteers, especially during the holiday season. So instead of writing a check, why not give yourself. You know, give your time rather than money, and of course, something we’ve spoken about a great length is to just have a plan. You know, start a budget. Track your spending. That way, like we’ve said, if you make a mistake or if you do overspend, you’ll have time to make adjustments and it won’t come out of the blue.

It won’t be a surprise to your finances. If you have any other questions, you know, we’re happy to take your holiday related questions about debt, credit, or budgeting. All that sort of stuff. So, feel free to connect with us. I hope that some of what we spoken about today will help you avoid that holiday debt hangover, and if you wanted to learn more about or speak to one of our financial counsellors, please be sure to check out our website and feel free to contact us at the information you see there. I’d also like to thank our executive director Jeff, again, for being with us here today and I hope that you all have a happy holiday.

Jeff: Thanks Ben. Pleasure to be here, but just one more thing. For some awesome savings tips, we have been putting out a campaign on Instagram and other social media platforms for several years called “100days100ways”. It’s a savings tip each day for the hundred days leading up to Christmas so follow us at “consolidatedcreditca.” That’s “consolidatedcreditca” to see them, so all the best, and have a great and prosperous and happy holiday season.

Ben: Great. Thanks again. Have a great day everyone!