Fact: December 25 is quickly approaching. At this point, you should feel a sense of calm as you enjoy a holiday well-spent with the people you love. But, instead, you may be feeling extreme panic and dread after taking a glimpse at your bank account.
If this sounds familiar, you’re probably among the many Canadians who overspend in pursuit of the perfect Christmas. A report by PWC Canada estimated Canadians will spend $1,563 each on average this holiday season. About $625 is estimated to be spent on gifts, almost $720 on travel, and the rest on entertainment.
And while you may budget for your general expenses throughout the year, many forget to budget for these extra holiday-related costs.
Here are a few things you can still do to cut down before the new year and have a wholly enjoyable holiday season.
If you haven’t finished decorating yet, consider a more simplistic approach
Yes, Christmas is less than a week away, but rushing to the stores for last-minute bobbles and tinsel could cost you a pretty penny. Most Christmas decorations won’t be on sale until after the holiday season, so come to terms that you’re going to have to cut back a bit. Make it a family adventure and scavenger for your own fir boughs and other natural decorations in the woods! This creative, homemade approach can apply to other things, too, such as making your own gifts and cards or baking at home.
Cash in your rewards
If you have a rewards credit card, you may have hundreds of unused cash-back that could be used to buy gifts, food, or decorations. Pay attention, especially if you have a credit card that calculates your rewards annually. You may have access to a year-end lump sum of cash-back that could be used toward your post-holiday balance.
For example, according to RateSupermarket’s Best of Finance methodology, you can earn over $850 in cash-back within two years of using the Scotia Momentum® Visa Infinite* Card. The card has an annual fee of $99 after the first year, but it offers up to four per cent cash-back on eligible purchases, and for a limited time, 10 per cent cash-back on everyday purchases for the first three months (up to $200)! And cash-back is awarded annually.
Or if you want to avoid fees altogether, you can earn over $250 in cash-back within two years with the no-fee MBNA Rewards Platinum Plus® Mastercard®. Not only do you get 2,500 bonus points for making your first eligible purchase, but you also get an additional 2,500 points just enrolling for e-statements.
Learn to say “no” and improvise
We know that feeling of FOMO (fear of missing out) is hard to ignore, but you’ll thank yourself later. This means using up all your holiday leftovers and cutting back on eating out, holding holiday movie marathons at your place instead of going out to Christmas concerts and shows, and going back to your closet instead of buying a new outfit for each holiday party.
Have “the talk” with your friends
We all love exchanging presents with the people we love, but buying for everyone on our list can get quite expensive. If you’re still shopping for presents, and happen to find out your friends have yet to find you a gift as well, suggest having a night in with a few beers or a bottle of wine and take-out instead.
If you have a large group of friends, you can also opt to play Secret Santa and put a price limit on the gifts. The holidays should truly be about quality time with our loved ones, anyway!
Limit your borrowing to reduce the New Year’s debt dread
Undoubtedly, Canadians will give their credit cards a work-out this holiday season and feel the pain in January. If you are going to borrow, use a credit card with a low interest rate and pay it off as soon as possible. If you don’t already have a low-interest credit card, you can compare rates at RateSupermarket.ca, putting you on track to reduce debt in the new year.
The holiday season is definitely a time to treat yourself, but it should also be stress-free and enjoyable. Start your new year off on the right foot and trim down the excess debt a bit this holiday season.
From myself and the team at RateSupermaket.ca, happy holidays to you and your’s!
This post has been updated.